TOKYO, May 29 (Reuters) - Japanese government bond (JGB)

yields rose on Wednesday to fresh multi-year highs as investors

remained cautious of further tightening by the Bank of Japan

(BOJ), with a central bank board member saying it could raise

rates if sharp yen falls affect inflation.

The 10-year JGB yield rose 3.5 basis points

(bps) to 1.070%, its highest since December 2011.

The two-year JGB yield, which tends to be more

sensitive to monetary policy expectations, rose 2 bps to a fresh

15-year high of 0.365%.

The market was paying close attention to the yen as it again

inched lower despite bouts of suspected interventions from Tokyo

at the end of April and early May.

"Along with putting the market on alert for currency

intervention, the weak yen heightens expectations for BOJ policy

adjustments," with many investors eyeing July for another hike,

Katsutoshi Inadome, a senior strategist at Sumitomo Mitsui Trust

Asset Management said.

JGB yields have steadily climbed to their highest in more

than a decade in recent weeks, after the BOJ dropped hawkish

signals and unexpectedly made cuts to its offer of bond purchase

earlier this month.

The cut has led many in the market to suspect the central

bank seeks to slow the yen's depreciation and has prompted

expectations for a full-fledged tapering of the BOJ's bond

purchases at its June meeting.

BOJ board member Seiji Adachi said on Wednesday the central

bank may raise interest rates if sharp falls in the yen boost

inflation or the public's perception of future prices move more

than expected.

JGB yields also got a boost from their U.S. peers, which

rose to multi-week highs in overnight trading.

The five-year yield jumped 3 bps to 0.620%,

its highest since February 2011.

The 20-year JGB yield leapt 3.5 bps to

1.890%, a level last seen in July 2011.

The 30-year JGB yield was up 4 bps at a

13-year peak of 2.225%.