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

bond yield hit a near four-week high on Wednesday amid caution

over the likelihood of another interest rate hike by the Bank of

Japan's (BOJ).

The 10-year JGB yield rose 1.5 basis points

(bps) to 0.795%, its highest since March 15. The two-year JGB

yield, highly sensitive to the BOJ's policy, rose

1 bp to 0.23%, its highest since March 2011.

"Caution for early rate hike emerged after a report said the

BOJ may raise its inflation forecast," said Yoshiro Sato,

economist at Resona Holdings.

Bloomberg News reported, citing people familiar with the

matter, that the BOJ will likely consider raising its inflation

forecast at a policy meeting later this month after surprisingly

strong results from annual wage negotiations.

The five-year yield rose 1.5 basis points to

0.425%, its highest since Nov. 14.

Yusuke Matsuo, senior market economist at Mizuho Securities,

said the market reacted to the report as there were no other

major catalysts.

"(BOJ Governor Kazuo) Ueda's view on the outlook has not

changed based on his recent comments," Matsuo said, citing

Ueda's remarks in parliament on Tuesday that Japan's inflation

has not exceeded 2%.

Investors were also cautious ahead of the key U.S. inflation

reading, further lifting Japanese yields.

"There is a caution in the market that the U.S. inflation is

persistent," said Resona Holdings' Sato.

Investors will closely watch the U.S. data due later in the

day as they seek direction on the Federal Reserve's next move in

interest rates. The data is expected to show a rise in headline

inflation to 3.4% year-on-year, from 3.2% in February.

The 20-year JGB yield rose 2 bps to 1.565%

and the 30-year JGB yield rose 2.5 bps to 1.865%.

The 40-year JGB yield rose 3 basis points to

2.175%.