TOKYO, Aug 6 (Reuters) - Japanese government bond yields

fell on Thursday after lower oil prices allayed inflation

concerns as investors maintained an optimistic stance over the

prospects of a Middle East peace deal.

The yield on 10-year JGBs, which moves inversely

to the price, fell 3 basis points (bps) to 2.775%.

The 30-year yield slipped 2.5 bps to 3.935%

ahead of the results of a bond auction later in the day.

"The easing of concerns over the Middle East situation is

seen as positive for the yen bond market, and while the market

overall remains soft, there may be relatively easy opportunities

for bargain buying," said Mizuho Securities market analyst Yuhi

Kawano.

The 20-year JGB yield fell 3 bps to 3.66% and

the 40-year yield declined 1.5 bps to 3.995%.

The 2-year yield edged 0.5 bp lower to 1.56%,

while the 5-year yield lost 2.5 bps to 2.025%.