TOKYO, Jan 16 (Reuters) - Japan's five-year government

bond yield hit a record high on Friday, as a sharp drop in the

yen raised ‌expectation for an early interest rate hike from ​the

Bank of Japan (BOJ).

The five-year yield rose 1.5 ‍basis points

(bps) to a record ⁠1.645%. The ⁠two-year bond yield

rose 1.5 bps to 1.195%, matching ‌the highest level since ​August

1996 set earlier this month. Bond yields move inversely to

prices.

"The yen ⁠is struggling to ‍rebound ​against the dollar and

that has raised bets that the BOJ would speed up ‍raising rates,"

said Yuki Kimura, a bond strategist at Okasan Securities.

A weaker yen tends to raise import costs, potentially

accelerating inflation and weighing on consumption.

Some market players ​expect ‍that the BOJ could raise rates

again as early as April, but ​economists surveyed by Reuters see

the central bank likely waiting until July before raising its

key interest rate.

The benchmark 10-year JGB yield rose 1.5 bps

to 2.175%.

U.S. Treasury yields were mostly higher ​overnight, after

stronger-than-expected economic data slightly dented

expectations that the Federal Reserve would cut rates in the

near term.

(Reporting ‍by Junko Fujita; Editing by Subhranshu Sahu)