MUMBAI, Aug 22 (Reuters) - Indian government bond yields

ended a tad lower, with the 10-year benchmark yield failing to

break below the 6.85% mark, while investors awaited guidance

from U.S. Federal Reserve Chair Jerome Powell for further

direction.

The benchmark 10-year yield ended at 6.8521%

as compared to its previous close of 6.8578%.

"Bond yields have stayed rangebound since the last few days,

with major focus now remaining on comments from Federal Reserve

Chair," said Aneesh Srivastava, executive director and chief

investment officer at Star Health Insurance.

Bond yields fell as U.S. peers declined on Wednesday, after

the revised jobs data and minutes of the Fed's July meeting

reinforced expectations that the rate-cut cycle will start in

September.

U.S. employers added fewer jobs than originally reported,

underscoring the growing concerns about the labour market.

Meanwhile, Fed minutes showed a vast majority of members

saying that a September cut was likely, with some even willing

to reduce rates at last month's meeting.

The odds of a 50 basis points cut in September stood around

32%, while bets of a 100 bps cut in 2024 have firmed up further,

as per the CME FedWatch tool.

However, comments from Fed Chair Jerome Powell on Friday at

the Jackson Hole symposium in Wyoming will be a key trigger for

the bond markets.

"If Powell indicates only 25 bps cut in September, I will

not be surprised if there is some selloff, but if he indicates

50 bps of move for September, then the India 10-year yield could

see a push towards 6.80% mark," Star Health's Srivastava added.

Local market participants will also keep an eye on the

minutes of the Reserve Bank of India's August meeting, due later

in the day. The central bank had kept its key interest rate and

policy stance unchanged.