(Adds comments, update yield levels)

TOKYO, Feb 5 (Reuters) - Japanese government bond (JGB)

yields hit new multi-year highs on Wednesday after government

data showed a rise in wages, bolstering chances of further

interest rate hikes.

The 10-year JGB yield rose to 1.295%, its

highest since April 2011, and was last at 1.29%, up 1.5 basis

points (bps) from the previous session.

The two-year JGB yield, sensitive to the Bank

of Japan's monetary policy, rose 2 bps to 0.76%, its highest

since October 2008.

"The market sees declines of JGB yields are limited as they

see the BOJ will keep raising interest rates, and that hurt

appetite for JGBs," said Takafumi Yamawaki, head of Japan rates

research at J.P. Morgan Securities.

Japan's inflation-adjusted real wages rose 0.6% year-on-year

in December due to a wintertime bonus bump, marking a second

consecutive monthly gain, with government officials expressing

optimism that the momentum is growing.

Wage hikes are considered a key factor for the BOJ to raise

rates. However, the market is divided about how far the policy

rate will rise, making it hard for investors to buy JGBs.

The five-year yield rose 2.5 bps to 0.95%, its

highest since November 2008, before easing to 0.94%.

The 20-year JGB yield rose 1 bp to 1.995%.

The 30-year JGB yield rose 0.5 bps to 2.33%.

The 40-year JGB yield fell 0.5 bps to 2.675%.

Separately, Kazuhiro Masaki, director-general of the BOJ's

monetary affairs department, told parliament that the central

bank will continue to raise rates if underlying inflation

accelerates toward its 2% target as projected.