TOKYO, March 11 (Reuters) - Japanese government bond

(JGB) yields dropped sharply on Tuesday, as U.S. Treasury yields

fell overnight and losses in Japan and U.S. equities boosted

appetite for safe-haven debt.

The 10-year JGB yield fell 5 basis points to

1.525% in its biggest daily fall since January 16. The five-year

yield fell 6 bps to 1.105% in its sharpest decline

since September 24.

"Investors turned to risk-off mode and scooped up bonds,"

said Miki Den, senior Japan rate strategist at SMBC Nikko

Securities.

U.S. Treasury yields fell on Monday with those on

interest-rate-sensitive 2-year notes on track for their largest

daily drop since September after U.S. President Donald Trump

declined to rule out a recession as a result of his tariff

policies.

In Japan, the benchmark Nikkei index fell more than

2% earlier in the session, on Wall Street's weakness and a

stronger yen.

The JGB yields hit more-than-a-decade highs this week amid

expectations that the Bank of Japan (BOJ) would raise interest

rates faster and higher on the back of rising wages and prices.

The 10-year JGB yield touched a 16-year high of 1.575% on

Monday, and the five-year yield rose to as high as 1.16%.

SMBC Nikko's Den said the declines in the yield of the

10-year JGB will be limited and the yield will not fall below

1.5%.

"With the yields hovering at this level, only limited

investor groups would want to buy the JGBs", said Den, adding

that those would be foreign investors and pension funds who want

to rebalance their portfolios.

The two-year JGB yield fell 4 bps to 0.83%.

The 20-year JGB yield declined 2.5 bps to

2.29% and the 30-year JGB yield fell 2 bps to

2.58%.

The 40-year JGB yield declined 1.5 bps to

2.875%.

(Reporting by Junko Fujita; Editing by Mrigank Dhaniwala)