TOKYO, Aug 1 (Reuters) - Japanese government bonds

(JGBs) rose on Friday as economic uncertainty bolstered the case

for the central bank to put off any tightening of monetary

policy.

The benchmark 10-year JGB yield fell 1 basis

point (bp) to 1.54%. The 20-year yield fell 3 bps

to 2.51%. Yields fall when bond prices rise.

The Bank of Japan on Thursday kept its short-term interest

rates steady at 0.5%, but revised up its inflation forecasts in

a sign that it would stay on its path of gradually raising

rates.

JGBs fell immediately after the announcement, but then

rallied later in the session after comments by BOJ Governor

Kazuo Ueda were interpreted as dovish. Ueda flagged continuing

risks to the economic outlook in keeping interest rates steady.

"Governor Ueda was quite cautious, but I still expect the

BOJ to hike its policy rate by October 30," said Koichi

Fujishiro, chief economist at Dai-ichi Life Research Institute.

Demand for safety assets was also bolstered as the United

States continued to use the threat of tariffs to pressure trade

partners into deals. Shortly before Asian markets opened, U.S.

President Donald Trump slapped dozens of countries with steep

tariffs.

The BOJ said in its quarterly report that uncertainty over

the impact of U.S. trade policy "remains high" - a less

pessimistic view than in May when it said uncertainty was

"extremely high."

Japan's long-dated JGB yields remain near record peaks after

the ruling coalition lost its majority in upper house elections

last month. Opposition parties advocating debt-funded tax cuts

have strengthened, adding pressure on fiscally conservative

Prime Minister Shigeru Ishiba to step aside.

The yield on the 40-year JGB, Japan's longest

tenor, fell 4 basis points to 3.315%.