TOKYO, July 23 (Reuters) - Japan's two-year government bond

yield hit a 31-year high on Thursday on growing bets that the

Bank of Japan would accelerate the pace of interest rate hikes.

Here are a few details:

* The two-year yield, the one most sensitive

to BOJ policy rates, rose 5 basis points (bps) to 1.49%, its

highest level since May 1995.

* The 10-year JGB yield rose 2.5 bps to 2.76%

and the five-year JGB yield rose 4 bps to 2%.

* The two-year bond yield jumped in the previous session

after a Bloomberg News report that BOJ officials were open to

raising interest rates at a faster pace than the consensus among

economists.

* "The prospects that the BOJ may raise its policy rate in

October have increased," said Masahito Sugawara, a senior

strategist at Daiwa Securities.

* Swap rates indicate about an 80% chance of a 25-bp

increase to 1.25% in October, up from around 70% until the

previous session, Sugawara said.

* The Bloomberg report came after the yen fell to an almost

four-decade low against the U.S. dollar on Wednesday.

* "The driver of the dollar's strength is not just the yen's

weakness, but also other factors such as the rise in oil prices

and bets for Federal Reserve rate hikes," said Sugawara.

* "Under this circumstance, the currency intervention would

now work, therefore, the BOJ might have signalled its intention

to raise rates faster to stem the weak yen," he said.

* The JGB yields rose as supply pressure eased after a round

of bond auctions for July completed with the 40-year bond sale

on Wednesday, which drew stronger demand than the market had

expected.

(Reporting by Junko Fujita; Editing by Subhranshu Sahu)