(Updates yields, adds context on)

By Satoshi Sugiyama

TOKYO, March 11 (Reuters) - Japan's super-long

government bonds eased on Wednesday, as traders remained wary of

inflation risks amid volatile crude oil prices tied to the

ongoing U.S.-Israeli war against Iran.

The 20-year JGB yield climbed 1 basis point

(bp) to 3.040% while the 30-year yield added 0.5

bps to 3.425%. The yield on the 40-year JGB,

Japan's longest tenor, rose 3 bps to 3.665%. Yields move

inversely to bond prices.

"Even though oil prices have edged down somewhat, they are

still staying high, leaving inflation worries lingering in the

market," said Takahiro Otsuka, senior fixed income strategist at

Mitsubishi UFJ Morgan Stanley Securities.

Global markets have been betting that U.S. President Donald

Trump will seek to end the conflict soon, but Trump has also

repeatedly threatened to hit Iran hard over moves to stop the

flow of energy supplies through the Strait of Hormuz.

A Reuters poll published on Wednesday showed the Bank of

Japan will keep its key interest rate steady at a policy meeting

next week but likely raise it to 1.00% by end-June, expectations

largely unchanged from the start of the war.

The benchmark 10-year JGB yield fell 1 bp to

2.170%, while the two-year yield, which is the

most sensitive to BOJ policy rates, decreased 0.5 bps to 1.245%.

Meanwhile, the five-year yield reversed course

and declined following a stronger-than-expected auction result.

Its bid-to-cover ratio was the highest since last October while

its tail was the lowest since January 2025.

"Strong auction results pointed to firm demand for five-year

debt, prompting more investors to buy rather than sell in the

afternoon session," said Lisa Mochizuki, analyst at SMBC Nikko

Securities.

($1 = 158.0000 yen)