(Updates at 0220 GMT)

TOKYO, Aug 23 (Reuters) - Japanese government bond

yields rose on Friday as Bank of Japan Governor Kazuo Ueda

signalled his readiness to continue policy tightening if

inflation and economic growth remained on track.

The 10-year JGB yield rose 2 basis points to

0.89%. It had hit 0.895% before Ueda's remarks.

The two-year JGB yield rose 2 bps to 0.375%.

The five-year yield rose 2 bps to 0.505%.

Ueda reaffirmed his resolve to raise interest rates if

inflation stayed on course to sustainably hit the 2% target, but

warned financial markets remained unstable.

"His remarks were in line with what the BOJ said in its

outlook report at the end of July. The BOJ's stance to raise

rates has not been changed," said Miki Den, senior Japan rate

strategist at SMBC Nikko Securities.

The yields rose before Ueda's speech because the market had

priced in the comments to be issued from Ueda, Den said.

Ueda is speaking at a special session of Japan's parliament

and is discussing the central bank's decision to raise interest

rates last month in a sudden hawkish turn.

The market saw the BOJ's move as a factor in the collapse of

the Japanese stock market earlier this month, where the Nikkei

posted its biggest single-day drop since the 1987 Black

Monday sell-offs on Aug. 5.

Sentiment improved after BOJ Deputy Governor Shinichi Ueda

said the central bank would not hike rates when markets were

unstable.

(Reporting by Junko Fujita; Editing by Subhranshu Sahu)