Short-end JGB yields hit one-month high on BOJ Gov's hawkish remarks

(Updates yields)

TOKYO, Jan 23 (Reuters) - Japan's short-term government bond yield hit a one-month high on Tuesday after the Bank of Japan Governor Kazuo Ueda said prospects of meeting the inflation target were rising, fuelling bets for the early end of ultra-loose policy.

The two-year JGB yield rose 3 basis points (bps) to 0.050%, its highest since Dec. 27. The five-year yield rose 3.5 bps to 0.275%, its highest since Dec. 19.

When asked whether an exit from the negative rate policy was nearing, Ueda said the prospects of seeing the inflation trend hit 2% were gradually heightening.

"Overall, there was nothing new from today's policy meeting so his comments on the prospects of achieving 2% inflation was focused," Katsutoshi Inadome, a senior strategist at Sumitomo Mitsui Trust Asset Management.

"And that comment was taken as hawkish."

At the two-day meeting that concluded earlier in the day, the BOJ left unchanged its short-term rate target at -0.1% and that for the 10-year bond yield at around 0%.

Expectations of a January policy shift had receded after a devastating earthquake hit western Japan on New Year's day. Many market players expect a policy tweak to take place in March or April at the earliest.

Super-long bond yields fell. The 20-year JGB yield fell 3 bps to 1.42% and the 30-year JGB yield slipped 3.5 bps to 1.73%. The 40-year JGB yield fell 3.5 bps to 1.995%.

The spread between 10-year and 30-year JGBs last stood at 108 bps, the widest since January last year. That compared with a spread of 22 bps for U.S. 10-year and 30-year Treasury yields.

"Investors bought back super-long-dated bonds, which became cheap after their yields rose sharply in the past sessions," said Tadashi Matsukawa, head of fixed income investment at PineBridge Investments Japan.

The 10-year JGB yield fell 1.5 bps to 0.635%.

(Reporting by Junko Fujita; Editing by Rashmi Aich and Subhranshu Sahu and Janane Venkatraman)