(Updates yield levels, adds details about market expectations)

By Brigid Riley

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 3 basis points

(bps) to 1.065%, while 10-year JGB futures fell 0.25

points to 142.32 yen.

Market expectations for an interest rate hike in Japan this

month were volatile after a couple of media reports earlier

suggested the BOJ may stand pat at its Dec. 18-19 monetary

policy meeting.

Following an announcement that BOJ Deputy Governor Ryozo

Himino will speak on Jan. 14 and further media coverage, bets

for a December rate hike have significantly faded.

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

the BOJ this week.

Elsewhere, 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 bps and signal it will pause rate cuts

as it grapples with inflation running above its 2% annual

target.

"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, said

Hiroshi Namioka, chief strategist at T&D Asset Management.

Reuters reported last week that the BOJ is leaning towards

keeping rates steady in December as policymakers prefer to spend

more time scrutinising overseas risks and clues on next year's

wage outlook.

The two-year JGB yield edged up 1.5 bps to

0.575%, while the five-year yield rose 2.5 bps to

0.715%.

The 20-year JGB yield jumped 4 bps to a

two-week high of 1.88% ahead of an auction for the bonds on

Tuesday.

The 30-year JGB yield was up 3.5 bps at

2.275%.

The 40-year JGB yield climbed 3 bps to 2.64%.