TOKYO, June 13 (Reuters) - Japanese government bond

(JGB) yields slipped on Thursday, tracking a decline in their

U.S. peers, although moves were rangebound ahead of the Bank of

Japan's (BOJ) monetary policy decision this week.

U.S. Treasury yields, with which the JGB market tends to

move in tandem, fell overnight after cooler-than-expected

domestic consumer prices raised hopes the Federal Reserve would

begin cutting interest rates in coming months. Expectations were

only partly dampened by new Fed projections that pointed to some

caution.

The 10-year JGB yield fell 2 basis points

(bps) to 0.965%, while the two-year JGB yield

edged down 1.5 bps to a one-month low of 0.32%.

But investors are taking a cautious stance as the BOJ begins

its two-day policy meeting on Thursday.

While Japan's central bank is expected to keep rates steady,

market players were waiting to see if it will begin tapering its

bond purchases.

The BOJ will consider trimming its bond buying this week,

according to the Nikkei newspaper. Reuters reported last week

that policymakers were brainstorming ways to slow its bond

buying and may offer fresh guidance at the June meeting.

"Rather than cutting its JGB purchases and restoring market

function all at once, I think the BOJ will try to do it while

limiting jumps in yields as much as possible," Yoshiro Sato, an

economist at Resona Holdings said.

Japan's central bank currently purchases bonds at a pace of

about 6 trillion yen ($38.21 billion) per month, just enough to

maintain its balance sheet.

Investors have been on alert for an official cut following a

surprise reduction to the central bank's bond purchases on May

13.

The five-year yield touched its lowest since

May 16 at 0.53% before inching up. It was last 0.5 bp lower at

0.55%.

The 20-year JGB yield and 30-year JGB yield

both slid 2.5 bps to 1.77% and 2.115%,

respectively.

($1 = 157.0200 yen)

(Reporting by Brigid Riley; Editing by Mrigank Dhaniwala)