TOKYO, Sept 5 (Reuters) - Japanese government bond

yields sank on Thursday, tracking declines in U.S. Treasury

yields after more soft economic data stoked bets the Federal

Reserve may cut interest rates by a super-sized 50 basis points

(bps) this month.

The 10-year JGB yield dropped 2 bps to 0.865%

as of 0441 GMT, after dipping to a two-week low of 0.860%

earlier in the session.

Benchmark 10-year JGB futures rose 0.1 yen to

144.92 yen after earlier touching 145.15 yen for the first time

since Aug. 16. Bond yields move inversely to prices.

The equivalent-maturity U.S. yields sagged

7.6 bps overnight and continued their decline in Asian time to

as low as 3.75%, a one-month trough.

Data released on Wednesday showed U.S. job openings dropped

to a 3-1/2-year low in July, spurring traders to ramp up odds of

a half-point Fed reduction on Sept. 18 to 45%, from 38% a day

earlier, according to the CME Group's FedWatch Tool.

The market is now bracing for weekly U.S. jobless claims

data later on Thursday, ahead of all-important monthly payrolls

figures on Friday.

"Sentiment-wise, it's just risk-off," said Shoki Omori,

chief Japan desk strategist at Mizuho Securities, pointing to

heightened demand for bonds amid a sell-off in global equities.

"It's not like people want to trade aggressively - it's more

defensive," he added. "People are just trying to prepare their

positions for Friday."

While Omori expects the Fed to opt for a 25-bp reduction

this month, as "the U.S. economy is still OK," if equities

continue to dive, it could push 10-year JGB yields to 0.82%.

The 30-year JGB yield declined 2 bps to

2.045%, with analysts describing the results of an auction of

the bonds on Thursday as decent.

The 20-year JGB yield lost 1.5 bps to 1.680%.

The five-year yield edged down 0.5 bp to

0.50%, while the two-year yield was flat at 0.37%.