TOKYO, April 19 (Reuters) - Japanese government bond

(JGB) yields fell sharply on Friday as reports of a possible

missile strike drove safe-haven flows.

Israeli missiles have hit a site in Iran, ABC News reported

late on Thursday, citing a U.S. official, while Iranian state

media reported an explosion in the center of the country, days

after Iran launched a retaliatory drone strike on Israel.

Benchmark 10-year JGB futures jumped 0.42 yen to

144.83 yen in the wake of the reports.

The 10-year JGB yield, which moves inversely

to bond prices, fell 4 basis points (bps) to 0.825%, its

sharpest drop since early February.

"For the moment, a risk-off mood is spreading, and money is

flowing to government bonds as a flight to safe assets," said

Keisuke Tsuruta, a fixed income strategist at Mitsubishi UFJ

Morgan Stanley Securities.

U.S. Treasury yields saw steep declines, reversing from near

five-month highs.

Gold and crude oil also jumped following the media reports,

while the yen, which has languished near 34-year lows against

the U.S. dollar, strengthened on safe-haven gains.

The 20-year JGB yield fell 3 bps to 1.595%,

while the 30-year JGB yield declined 3.5 bps to

1.875%.

On the short end, the five-year yield was down

2.5 bps at 0.445%.

Meanwhile, Bank of Japan Governor (BOJ) Kazuo Ueda said on

Thursday the central bank may raise interest rates again if the

yen's declines significantly push up inflation.

His remarks heighten the chance the BOJ will revise up its

price forecasts next week and project inflation to stay around

its 2% target through early 2027, which would boost market

expectations of another rate hike this year.

The central bank will hold its April monetary policy meeting

next week.

Japan's core inflation slowed in March due to mild rises in

food prices while staying comfortably above the central bank's

2% target, government data showed on Friday.