TOKYO, July 17 (Reuters) - Japanese government bond

(JGB) yields ticked higher on Wednesday after choppy trading, as

investors see-sawed on bets for the Bank of Japan (BOJ) raising

interest rates later this month.

JGB yields fell in early trading, as market players

speculated that a somewhat stronger yen may give the BOJ enough

room to hold off on its second rate hike this year.

Buying of JGBs also received support after 10-year U.S.

Treasury yields fell to a four-month low on Tuesday on

expectations that the Fed could cut rates as soon as

September.

But JGB yields reversed course in the Asian afternoon, after

Japan's digital minister, Kono Taro, said in an interview with

Bloomberg that the BOJ needed to raise rates to support the yen.

The benchmark 10-year JGB yield fell to its

lowest since June 26 at 1.005% before changing course. It was

last up 1 basis point (bps) at 1.03%.

Meanwhile, 10-year JGB futures fell 0.16 yen to

143.22 yen.

"While the (market) view that additional rate hikes may

still be a little ways off remains, given that news, investors

are nevertheless cautious," said Makoto Suzuki, senior bond

strategist at Okasan Securities.

A portion of market players have been betting that Japan's

central bank could raise rates from near-zero to slow the yen's

fall.

But the currency sharply appreciated from the upper 161

range to 157.40 on Thursday and rallied again on Friday in what

is suspected to have been another round of currency intervention

by Japanese authorities.

Suzuki says that he sees about a 50% chance of a July hike,

with the yen's recent rally not making a significant difference.

The two-year JGB yield, which corresponds more

closely with monetary policy expectations, climbed 1.5 bps to

0.325%.

The five-year yield rose 1 bp to 0.57%.

The 20-year JGB yield was flat at 1.85%,

while the 30-year JGB yield ticked up 0.5 bp to

2.165%.

(Reporting by Brigid Riley; Editing by Janane Venkatraman

)