TOKYO, Dec 6 (Reuters) - Short-term Japanese government

bond yields ticked higher while those on longer-dated debt

declined, flattening the yield curve as investors weighed the

odds of a Bank of Japan interest rate hike this month, while

also awaiting a key U.S. jobs report later in the day.

The two-year JGB yield, which is most

sensitive to monetary policy expectations, rose 0.5 basis point

(bp) to 0.6% as of 0422 GMT.

The five-year yield was flat at 0.73% and the

10-year yield edged 1 bp lower to 1.055%.

The 30-year JGB yield slipped 2 bps to

2.265%, pressured by a smooth auction of the securities in the

previous session. The 20-year yield declined 1.5

bps to 1.855%.

Benchmark 10-year JGB futures added 0.07 yen to

143.05 yen.

"Investors figure that the pace of BOJ hike may not be

sufficient to rein in inflation (and) this probably also

accounts for why the JGB curve remains the steepest across the

G10 space," said DBS strategists Eugene Leow and Philip Wee in a

client note.

"We think JPY rates are biased higher with some room to go

before the neutral target rate, estimated to be around 1%."

Market-implied odds for a quarter-point rate rise to 0.5% on

Dec. 19 currently stand at 41.3%, after ditching the negative

interest-rate policy in March and following up with a

quarter-point increase in July.

Bets have fluctuated this week, with a pair of domestic

media reports suggesting the BOJ may forgo additional tightening

this year, while dovish central bank board member Toyoaki

Nakamura said he was "not opposed to rate hikes".

Meanwhile, investors are anxiously awaiting the monthly U.S.

non-farm payrolls report later on Friday for fresh cues on the

pace of Federal Reserve rate cuts.