TOKYO, Sept 2 (Reuters) - Japanese government bond

yields rose on Monday, tracking U.S. Treasury yields higher at

the end of last week, while auctions for domestic bonds this

week weighed on sentiment.

The 10-year JGB yield rose 1.5 basis points

(bps) to 0.905%. The two-year JGB yield rose 0.5

bp to 0.365% and the five-year yield rose 1.5 bps

to 0.51%.

U.S. Treasury yields advanced on Friday after economic data

raised expectations the Federal Reserve was likely to opt for a

small rate cut at its September meeting.

"In addition to U.S. Treasury yields rising higher on

Friday, we have auctions for 10-and-30-year bonds this week,

that weighed on investor sentiment," said Takahiro Ohtsuka,

senior fixed income strategist at Mitsubishi UFJ Morgan Stanley

Securities.

The finance ministry will hold the 10-year bond auction on

Tuesday and the 30-year bond auction on Thursday.

Still the current level of the yield on the 10-year bonds is

not high enough if the Bank of Japan is to raise interest rates

this year.

"The market is probably not pricing in a possible rate hike

in September or October," said Ohtsuka.

The 30-year JGB yield rose 1.5 bps to

2.105%.

The 20-year JGB yield also rose 1.5 basis

points to 1.725%.

The 40-year JGB yield rose 2.5 basis points

to 2.385%.

(Reporting by Junko Fujita; Editing by Mrigank Dhaniwala)