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

yield rose on Tuesday, on worries about government spending as

sources for potential food tax cuts that Prime Minister Sanae

Takaichi pledged to carry out remain unclear.

The benchmark 10-year JGB yield rose to as high

as 2.78%, and was last up 1 basis point at 2.78%. Yields move

inversely to bond prices.

Ruling and opposition parties have failed to reach an agreement

on details of the programme at the parliament session concluded

on Monday, but Takaichi said she would swiftly submit a bill for

the cuts.

"Worries over the government spending will keep weighing on

investor sentiment as the Takaichi government has not shown the

source of funding for the planned tax cuts," said Takashi

Fujiwara, chief fund manager at Resona Asset Management.

The 20-year JGB yield was up 2 bps at 3.67%. The

30-year yield rose 1.5 bps to 3.980%.

Shorter-end yields fell, with the two-year yield

, down 1 bp to 1.49%. The five-year yield

fell 1 bp to 2.005%, retreating from a record high

of 2.045% marked on Friday.

The market is awaiting a message from Bank of Japan Governor

Kazuo Ueda at the end of its policy meeting on Friday, where the

central bank is expected to keep the policy rate steady.

"The market is expecting interest rate hikes at a faster

pace, but the BOJ's message will be limited to show its caution

for upward pressure on prices," said Kento Minami, senior

economist at Daiwa Securities.

Minami expects the BOJ to raise interest rates again in

October to stem the yen's weakness as central banks in the U.S.

and Europe could increase rates in September.

The BOJ raised interest rates to a 31-year high of 1% in

June and signalled readiness to tighten further.

"It would be too late for the BOJ to raise rates in

December," Minami said.