TOKYO, Aug 14 (Reuters) - Japanese government bond

yields fell on Wednesday, tracking U.S. Treasury peers'

declines, while a better-than-expected auction outcome supported

sentiment.

The 10-year JGB yield fell 3 basis points

(bps) to 0.810% and the five-year yield fell 1.5

bps to 0.420%.

U.S. Treasury yields declined on Tuesday after the release

of a tame producer prices report that looked unlikely to divert

the Federal Reserve from an easing path, with Wednesday's

consumer prices data set to fill out the inflation picture.

In Japan, the outcome of the five-year auction was not

strong but it was better than market expectations, strategists

said.

"The market was very cautious about the outcome of the

five-year bond auction but the outcome was not as bad, which

lifted market sentiment," said Katsutoshi Inadome, a senior

strategist at Sumitomo Mitsui Trust Asset Management.

The two-year JGB yield fell 0.5 bp to 0.29%,

while the two-year interest rate swap was 0.385%.

The 20-year JGB yield fell 4.5 bps to 1.635%

and the 30-year JGB yield fell 3.5 bps to 2.020%.

The 40-year JGB yield was flat at 2.29%.

(Reporting by Junko Fujita; Editing by Mrigank Dhaniwala)