TOKYO, July 14 (Reuters) - Benchmark Japanese government

bond (JGB) yields rose for a second day on Tuesday ahead of a

sale of 20-year bonds that will test investor demand as

inflation concerns mount.

Here are a few details:

* The benchmark 10-year JGB yield rose 1

basis point (bp) to 2.795%. Yields move inversely to bond

prices.

* The Ministry of Finance will sell about 700 billion yen

($4.31 billion) in 20-year bonds later in the session.

* U.S. Treasury yields climbed sharply overnight as

inflation fears were stoked by rising oil prices following

renewed U.S.-Iran tensions.

* "While high yield levels are expected to attract some

buying demand, concerns about inflation and fiscal expansion are

leading investors to adopt a cautious stance," Takayuki

Miyajima, senior economist at Sony Financial Group, said in a

note.

* JGBs rallied sharply on Friday after Finance Minister

Satsuki Katayama suggested that the Government Pension

Investment Fund (GPIF) and other retirement vehicles could be

encouraged to direct more investments into domestic assets.

* Those expectations diminished after a Reuters report that

the government has no immediate plans to change target asset

allocations of its state pension funds.

* The two-year yield, the one most sensitive

to Bank of Japan policy rates, and the five-year yield

both held steady.

($1 = 162.4100 yen)