TOKYO, Nov 26 (Reuters) - Japanese government bond (JGB)

yields declined on Tuesday, tracking an overnight fall in U.S.

Treasury yields as investors awaited fresh market signals.

The 10-year JGB yield was last down 1 basis

point (bp) at 1.06%, while 10-year JGB futures rose

0.08 points to 142.93 yen.

U.S. Treasury yields declined sharply on Monday as investors

expected a more moderate than feared U.S. fiscal trajectory

after hedge fund manager Scott Bessent was nominated as U.S.

Treasury secretary by President-elect Donald Trump on Friday.

But after dropping in morning trade in tandem with U.S.

yields, movement has been limited as the JGB market struggled

between buying and selling.

JGB yields climbed in recent sessions as the market began to

price in a higher chance that the Bank of Japan will increase

interest rates in December. The shift was largely spurred by

expectations that the yen's decline could pressure the central

bank to act.

That upward trend in yields may have peaked out for the time

being, said Yurie Suzuki, market analyst at Mizuho Securities.

"If there actually is a rate hike in December, it will be

easier to factor in future rate increases, but I think market

pricing (for a year-end hike) seems to have paused for now."

The dollar earlier rose after Trump pledged big tariffs on

Canada, Mexico and China.

But the yen hadn't moved much from its range. The dollar was

last 0.12% lower at 153.99 yen.

"As such, I don't think the impact on yen bond yields is

that significant," said Suzuki.

The two-year JGB yield, which corresponds more

closely to monetary policy expectations, was flat at 0.585%.

The 20-year JGB yield fell 1.5 bps to 1.865%,

while the 30-year JGB yield ticked down 0.5 bp to

2.28%. Both sat just above two-week lows hit earlier in the day.

The five-year yield edged down 0.5 bp to

0.73%.