TOKYO, May 14 (Reuters) - Benchmark Japanese government

bonds (JGB) fell for a fourth consecutive session on Thursday,

with the yields nearing a three-decade high, as inflation fears

and fiscal concerns mounted.

The 10-year JGB yield rose 2 basis points

(bps) to 2.605%, its highest level since May 1997. The 30-year

yield gained 3 bps to 3.845%, a near four-month

high, helping attract demand at an auction of the bonds.

Bond yields move inversely to prices.

Government bond yields around the world have been on the

rise due to inflation risks linked to a Middle East-driven

energy shock. Long-term JGB yields extended gains after the

Kyodo news agency reported that the Japanese government is

looking to compile an extra budget to help households contend

with rising fuel costs, a move that would further strain the

nation's finances.

"Inflation concerns against the backdrop of elevated crude

oil prices continue to weigh on the market," Takayuki Miyajima,

senior economist at Sony Financial Group, wrote in a report.

"There's lingering caution over fiscal deterioration linked to

measures to address high crude oil prices."

"That said, we can expect some investment demand to emerge

with the 30-year JGB yield having recently climbed to the 3.8%

range," he added.

The Ministry of Finance sold about 600 billion yen ($3.80

billion) in 30-year debt on Thursday. The bid-to-cover ratio, a

measure of demand at an auction, rose to 3.49 from 3.115 at the

previous sale.

The yield on the 20-year JGB advanced 2 bps

to a record 3.495%, while the yield on the 40-year bond

, Japan's longest tenor, added 2.5 bps to 4.095%,

the highest since January 20.

Shorter rates edged lower. The two-year yield,

the one most sensitive to Bank of Japan policy rates, eased 0.5

bp to 1.385%, while the five-year yield slid 0.5

bp to 1.925%.

($1 = 157.9600 yen)