TOKYO, June 20 (Reuters) - Japanese short-term

government bond yields rose on Thursday while longer-term yields

fell, flattening the yield curve, as investors continued to

adjust to reports that the finance ministry may shorten the

average maturity in future issuance.

The two-year JGB yield rose 1 basis point (bp)

to 0.29% and the 30-year yield fell 1 bp to

2.115% as of 0530 GMT.

The 10-year yield was up 1.5 bps at 0.945%.

Benchmark 10-year JGB futures fell 0.18 yen to

143.77. Bond yields fall when prices rise.

Reuters and other media reported on Wednesday that a finance

ministry panel is set to recommend issuing shorter-duration debt

while trimming issuance of the longest bonds. The proposal will

be among the factors the government will consider while

compiling its debt issuance plan for the next fiscal year

beginning in April 2025.

The five-year JGB yield rose 1 bp to 0.515% on

Thursday. The 20-year yield was flat at 1.765%.

Investors are also hungry for new hints on when the Bank of

Japan will raise interest rates again, following the first hike

since 2007 in March.

On Tuesday, BOJ Governor Kazuo Ueda told parliament a rate

hike at the July meeting is "quite possible," although many

market participants are inclined to think the central bank will

refrain from doing so at a gathering where it will also outline

its quantitative tightening plans.

"Many investors appear sceptical, suspecting that Gov. Ueda

is simply bluffing in order to curb the yen depreciation

pressure," Morgan Stanley MUFG Securities economists wrote in a

report, in which they reiterated their call for a July hike.

"We don't think he was bluffing, as the BOJ is confident

about broad wage increases among SMEs (small- and medium-sized

enterprises), in our view."