TOKYO, April 1 (Reuters) - Japanese government bond

yields fell on Wednesday, as optimism for de-escalation of the

Middle East conflict eased concerns over inflation.

The 10-year JGB yield fell 2.5 basis points to

2.330%, starting the new fiscal year on a positive note after

the benchmark yield hit a nearly three-decade high last week.

The two-year JGB yield fell 1 bp to 1.365% and

the five-year yield fell 2 bps to 1.760%. Bond

prices move inversely to yields.

U.S. President Donald Trump said the United States could end

its military attacks on Iran within two to three weeks, and

Tehran did not have to make a deal as a prerequisite for the

conflict to wind down.

The bonds were sold heavily last week, sending the five-year

bond yield to a record high, as rising oil prices fanned fears

of inflation and the Bank of Japan's early interest hike.

Investors adjusted positions at the end of the fiscal year,

which also drove the heavy selloff, strategists said.

"Investors want to rebuild their positions at the start of

the new fiscal year, which could boost appetite for super-long

bonds as well," said Yuki Kimura, bond strategist at Okasan

Securities.

Super-long bonds were not traded in the morning session.

Their yields jumped last week as buyers were limited on caution

for further selloffs, strategists said.