(Adds comments, background)

By Brigid Riley and Junko Fujita

TOKYO, Sept 11 (Reuters) -

The Bank of Japan (BOJ) stepped in the market on Monday, after a report flagging a possible early end to the central bank's negative rate policy pushed Japanese government bond yields higher across maturities.

The 10-year JGB yield jumped 6 basis points (bps) to 0.705%, hitting its highest since January 2014.

The sharp rise in the yield came as investors reacted to BOJ Governor Kazuo Ueda's interview with the Yomiuri newspaper, published Saturday, in which he said the central bank could end its negative interest rate policy when its 2% inflation goal is in sight, indicating possible rate hikes by year-end.

On Monday, the BOJ said it would offer five-year loans against collateral to banks, the first such operation since February. The move is intended to encourage investors to buy five-year bonds with loans carrying lower rates.

The 5-year bond yield jumped 7 bps to 0.285%, its highest since Jan. 18.

The announcement by the BOJ, however, has so far failed to push yields down from the highs reached in the Asian morning.

"Such a reaction suggests market participants are still concerned that the BOJ will move forward earlier than expected (with) monetary normalisation," including ending negative interest rate policy, said Ryutaro Kimura, fixed income strategist at AXA Investment Managers.

The loan duration has been set between Sept. 15 this year to Sept. 15, 2028, the central bank said. Details of the terms are to be set later.

The BOJ, so far an outlier among hawkish global central banks, tweaked its yield curve control policy late in July to allow the 10-year yield to move as far as 1%.

However, fears of emergency bond-buying operations by the central bank kept the yield around the mid-0.6% range until Monday.

The BOJ typically contains elevated yields also through offering low-rate loans to boost amounts for its regular bond-buying. The 20-year JGB yield sat 6 bps higher at a seven-month peak of 1.455%.

The 30-year JGB yield rose 4.5 bps to a nearly ten-year high of 1.71%.

On the short end, the two-year JGB yield rose 4 bps to 0.04%, its highest level since Jan. 13. (Reporting by Brigid Riley and Junko Fujita; Editing by Rashmi Aich and Janane Venkatraman)