TOKYO, Sept 6 (Reuters) - Japanese government bond (JGB)

yields struggled for direction on Friday as market participants

kept to the sidelines ahead of a crucial U.S. jobs report that

could shed more light on the state of the world's largest

economy.

The benchmark 10-year JGB yield was down 1

basis point (bp) at 0.86% as of 0355 GMT, while 10-year JGB

futures rose 0.11 point to 145.05 yen.

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

move in tandem, fell and interest rate-sensitive two-year yields

reached a 15-month low on Thursday after ADP jobs data showed

private employers added fewer jobs than anticipated last month.

But market focus was fixed on the more comprehensive U.S.

nonfarm payrolls report for August due later on Friday, as

investors seek reassurance that the economy is on track for a

soft landing.

Weaker-than-expected July nonfarm payroll figures last month

sparked fears of an imminent U.S. recession.

Cautious of a similar scenario playing out, investors "are

probably taking more of a 'wait-and-see' approach today," said

Hiroshi Namioka, chief strategist and fund manager at T&D Asset

Management.

Nonfarm payrolls are expected to have increased 160,000 in

August after rising 114,000 in July, according to the median

estimate of economists polled by Reuters. The unemployment rate

is expected to have eased to 4.2% from 4.3%.

The market impact could be "significant" if the unemployment

rate comes in higher than expected given sensitivity towards

labour market data, said Namioka.

The 20-year JGB yield rose 1 bp to 1.69%,

while the 30-year JGB yield fell 1.5 bps to

2.025%.

The two-year JGB yield ticked up 1 bp to

0.38%. The five-year yield was flat at 0.5%.

The market largely brushed aside data that showed Japanese

household spending rose less than expected in July, as consumers

remained wary of loosening their purse strings in the face of

higher prices.