Benchmark JGB yields rise as inflation worries mount ahead of debt sale

TOKYO, July 14 (Reuters) - Benchmark Japanese government bond (JGB) yields rose for a second day on Tuesday ahead of a sale of 20-year bonds that will test investor demand as inflation concerns mount.

Here are a few details:

• The benchmark 10-year JGB yield JP10YTN=JBTC rose 1 basis point (bp) to 2.795%. Yields move inversely to bond prices.
• The Ministry of Finance will sell about 700 billion yen ($4.31 billion) in 20-year bonds later in the session.
• U.S. Treasury yields climbed sharply overnight as inflation fears were stoked by rising oil prices following renewed U.S.-Iran tensions.
• "While high yield levels are expected to attract some buying demand, concerns about inflation and fiscal expansion are leading investors to adopt a cautious stance," Takayuki Miyajima, senior economist at Sony Financial Group, said in a note.
• JGBs rallied sharply on Friday after Finance Minister Satsuki Katayama suggested that the Government Pension Investment Fund (GPIF) and other retirement vehicles could be encouraged to direct more investments into domestic assets.
• Those expectations diminished after a Reuters report that the government has no immediate plans to change target asset allocations of its state pension funds.
• The two-year yield JP2YTN=JBTC, the one most sensitive to Bank of Japan policy rates, and the five-year yield JP5YTN=JBTC both held steady.