TOKYO, May 8 (Reuters) - Japanese government bond (JGB)

yields meandered on Wednesday, as caution over future rate hikes

by the Bank of Japan (BOJ) saw lacklustre demand at an auction

for 10-year JGBs, while increased bets for U.S. cut rates this

year supported buying.

Benchmark 10-year JGB futures fell 0.11 yen to

144.57 yen, while the 10-year JGB yield rose 0.5

basis point (bp) to 0.875%% following the auction results.

The bid-to-cover ratio, a measure of demand at auctions, was

3.15, the lowest since January, compared with 3.80 last month. A

smaller bid-to-cover ratio suggests less appetite for the bond.

Although short of expectations, the results were not wholly

surprising given anticipation that the BOJ will hike interest

rates again in the near future, Ryutaro Kimura, a fixed income

strategist at AXA Investment Managers said.

"It is reasonable to say that there was little incentive to

actively bid for 10-year JGBs in the mid-0.80% range."

Remarks by U.S. Treasury Secretary Janet Yellen late last

month on currency intervention have led some market players to

suspect the BOJ will have to take measures to slow the yen's

depreciation, Kimura said.

Yellen told Reuters in an interview that a currency

intervention is acceptable only in very rare and exceptional

circumstances.

BOJ Governor Kazuo Ueda said on Wednesday the central bank

may take monetary policy action if the yen's fall affects prices

significantly, offering the strongest hint to date the

currency's relentless decline could trigger another interest

rate hike.

The two-year JGB yield ticked up 0.5 bp to

0.280%.

The five-year yield climbed 1 bp to 0.480%.

Meanwhile, the superlong end declined, tracking the

benchmark 10-year Treasury yield, which fell to a three-week low

overnight amid hope that the Federal Reserve would lower rates

this year.

The 20-year JGB yield edged down 1 bp to

1.650%, while the 30-year JGB yield slid 1.5 bps

to 1.955%.

(Reporting by Brigid Riley; Editing by Mrigank Dhaniwala)