TOKYO, May 28 (Reuters) - Japan's 10-year government

bond yield hit a 12-year high on Tuesday as the market braced

for further tightening by the Bank of Japan, following a senior

official's hawkish comments.

The 10-year JGB yield rose 1.5 basis points

(bps) to 1.035%, its highest since April 2012.

On Monday, BOJ Deputy Governor Shinichi Uchida said the end

of Japan's battle against persistent deflation is in sight and

that labour market conditions have changed structurally and

irreversibly.

"Overall, his remarks were optimistic about the outlook of

Japan's inflation, which suggested the normalization of the

BOJ's policy is imminent," said Naoya Hasegawa, chief bond

strategist at Okasan Securities.

This month, JGB yields have risen due to hawkish hints from

the central bank, including an abrupt cut in the amounts for its

regular bond buying, as it seeks to contain the yen's

depreciation.

Sentiment was hurt also by a weak auction of the 350 billion

yen ($2.23 billion) of 10-year climate transition bonds .

The highest accepted yield was 1.04%, a discount over the

regular 10-year JGB yield.

"With uncertainties about the policy decision until the

BOJ's meeting next month, it was difficult for investors to be

aggressive on the climate transition bonds," Hasegawa said.

Climate transition bonds are a new class of bonds which aim

to fund the development of clean energy resources, such as

low-cost wind power generators and are expected to enjoy premium

over regular bonds.

Yields on other tenors were mixed, with the two-year JGB

yield inching up 0.5 bp to 0.35%, while the

five-year yield fell 0.5 bp to 0.590%.

The 20-year JGB yield fell 0.5 bp 1.855%.

The 30-year JGB yield rose 1.5 bps to

2.185%.

($1 = 156.8400 yen)