TOKYO, May 11 (Reuters) - Japanese government bonds

(JGBs) held steady on Monday as inflationary concerns mounted

ahead of a debt sale.

Futures on benchmark 10-year JGBs fell 0.01 yen to

129.69. The yield on the bond, which reached a

29-year high of 2.535% on April 30, held at 2.475%. Other tenors

had yet to trade early in the session.

Oil prices jumped on Monday after the United States and Iran

failed to agree to a peace proposal drafted by Washington while

the Strait of Hormuz remained largely closed.

Japan's Ministry of Finance will auction about 2.6 trillion

yen ($16.57 billion) in 10-year JGBs on Tuesday.

Investors are likely to be cautious ahead of the sale and

policy announcements that may emerge from a visit to Tokyo by

U.S. Treasury Secretary Scott Bessent, according to Sony

Financial Group chief economist Takayuki Miyajima.

"Concern about oil price-driven inflation appears to be

exerting upward pressure on domestic interest rates," Miyajima

said in a note.

"The market is likely to remain weighed down, as

participants keep a close eye on developments in the Middle East

and price trends."

($1 = 156.9100 yen)

(Reporting by Rocky Swift in Tokyo; Editing by Subhranshu Sahu)