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

rose on Thursday as a weak outcome of an auction for 10-year

government bonds prompted investors to sell them.

The 10-year JGB yield rose 3 basis points

(bps) to 1.325%.

The finance ministry's auction received bids worth 2.54

times the amount sold, lower than a ratio of 3.15 times at the

previous auction.

"Investors thought the 10-year bonds were expensive with the

current yield level," said Keisuke Tsuruta, senior fixed income

strategist at Mitsubishi UFJ Morgan Stanley Securities.

"The 10-year bond yield will hover at this level because it

is hard to gauge the Bank of Japan's rate path with

uncertainties of the U.S. tariff policy," said Tsuruta.

Shorter-dated bonds were also sold following the weak

auction, with the two-year JGB yield rising 1 bp

to 0.615% and the five-year JGB yield up 2 bps to

0.86%.

The 20-year JGB yield rose 1 bp to 2.3%.

Yields on longer-dated bonds fell as investors bought them

back after recent sell-offs.

The 30-year JGB yield fell 2.5 bps to 2.87%,

after hitting 2.885%, its highest since August 2004, earlier in

the session.

The 40-year JGB yield fell 0.5 bp to 3.33%.

(Reporting by Junko Fujita, additional reporting by Tokyo

markets team; Editing by Mrigank Dhaniwala)