TOKYO, June 20 (Reuters) - Japanese short-term government bond yields rose on Thursday while longer-term yields fell, flattening the yield curve, as investors continued to adjust to reports that the finance ministry may shorten the average maturity in future issuance.

The two-year JGB yield rose 1 basis point (bp) to 0.29% and the 30-year yield fell 1 bp to 2.115% as of 0530 GMT.

The 10-year yield was up 1.5 bps at 0.945%.

Benchmark 10-year JGB futures fell 0.18 yen to 143.77. Bond yields fall when prices rise.

Reuters and other media reported on Wednesday that a finance ministry panel is set to recommend issuing shorter-duration debt while trimming issuance of the longest bonds. The proposal will be among the factors the government will consider while compiling its debt issuance plan for the next fiscal year beginning in April 2025.

The five-year JGB yield rose 1 bp to 0.515% on Thursday. The 20-year yield was flat at 1.765%.

Investors are also hungry for new hints on when the Bank of Japan will raise interest rates again, following the first hike since 2007 in March.

On Tuesday, BOJ Governor Kazuo Ueda told parliament a rate hike at the July meeting is "quite possible," although many market participants are inclined to think the central bank will refrain from doing so at a gathering where it will also outline its quantitative tightening plans.

"Many investors appear sceptical, suspecting that Gov. Ueda is simply bluffing in order to curb the yen depreciation pressure," Morgan Stanley MUFG Securities economists wrote in a report, in which they reiterated their call for a July hike.

"We don't think he was bluffing, as the BOJ is confident about broad wage increases among SMEs (small- and medium-sized enterprises), in our view." (Reporting by Kevin Buckland; Editing by Sohini Goswami)