TOKYO, Dec 16 (Reuters) - Japanese government bond (JGB)

yields rose on Monday, tracking U.S. Treasury yields as

investors awaited monetary policy decisions by the Federal

Reserve and the Bank of Japan (BOJ) later this week.

The 10-year JGB yield climbed 2.5 basis

points (bps) to 1.06%, while 10-year JGB futures fell

0.23 points to 142.34 yen.

Benchmark 10-year U.S. Treasury yields rose to a three-week

high on Friday before the Fed is expected to cut rates on

Wednesday by 25 basis points and signal it will pause rate cuts

as it grapples with inflation running above its 2% annual

target.

JGB yields moved up across the curve after sliding last week

as investors backtracked on bets that the BOJ will raise

interest rates at its Dec. 18-19 monetary policy meeting.

"Given that U.S. interest rates have risen this much, I

think that is having the greater impact" on the JGB market on

Monday than any adjustments related to the BOJ's meeting and

rate hike expectations, said Hiroshi Namioka, chief strategist

at T&D Asset Management.

Reuters and other media outlets reported last week that

Japan's central bank is leaning toward keeping rates steady in

December, giving policymakers more time to analyse overseas

risks and clues on next year's wage outlook.

Markets now see only about a 21% chance of a rate hike from

the BOJ this week.

The two-year JGB yield edged up 1.5 bps to

0.575%, while the five-year yield rose 2 bps to

0.71%.

The 20-year JGB yield jumped 3.5 bps to just

over a one-week high of 1.875% ahead of an auction for the bonds

on Tuesday.

The 30-year JGB yield was up 3 bps at 2.27%.

The 40-year JGB yield also climbed 3 bps to

2.64%.