TOKYO, Jan 14 (Reuters) - Japanese government bond

yields rose to fresh 14-year highs on Tuesday, lifted by surging

U.S. bond yields and speculation of a possible interest rate

hike by the Bank of Japan next week.

The 10-year JGB yield advanced 5.5 basis

points (bps) to stand at 1.25% as of 0540 GMT, a level last seen

in April 2011.

That's after the equivalent U.S. Treasury yields

jumped to a 14-month peak of 4.805% overnight, having added more

than 12 bps in the two days since Friday's strong U.S. jobs

report spurred bets the Federal Reserve may not cut rates this

year.

The Japanese markets were closed on Monday for a national

holiday.

On Tuesday, BOJ Deputy Governor Ryozo Himino left the door

open to additional policy tightening on Jan. 24 by saying in a

speech to business leaders that "the board will discuss whether

to raise interest rates next week and reach a decision based on

the economic and price projections laid out in our quarterly

outlook report."

Himino made some "slightly optimistic comments on wage

hikes" but didn't give "clear hints" for an imminent tightening,

said Shoki Omori, chief Japan desk strategist at Mizuho

Securities.

"I would say the board is undecided at this point on whether

to hike in January."

Markets currently have priced in a 57% chance of a

quarter-point hike at the upcoming meeting.

The two-year JGB had yet to trade on the day.

The five-year yield rose 4.5 bps to 0.865%,

the highest since June 2009. An auction of five-year notes went

smoothly but had little impact on the market.

The 20-year JGB yield advanced 4.5 bps to

2.01%, a level last seen in May 2011. The 30-year yield

added 4 bps to 2.34%.

Benchmark 10-year JGB futures fell 0.48 yen to

140.58. Yields move inversely to bond prices.