(Updates at 0930 GMT)

By Harry Robertson and Ankur Banerjee

Aug 6 (Reuters) - U.S. Treasury yields rose further away

from one-year lows on Tuesday as comments from Federal Reserve

officials and economic data helped to allay the recession fears

that roiled global markets on Monday.

The two-year U.S. Treasury yield, which is highly

sensitive to interest rate expectations, was last up 9 basis

points (bps) to 3.973%.

It tumbled as low as 3.654% on Monday, a level not seen

since April 2023, before stronger-than-expected data helped push

it back higher. Yields move inversely to prices.

Survey data showed the

vast U.S. services sector

rebounded from a four-year low last month, with a measure

of employment rising for the first time since January.

"Markets might have overreacted during a hot summer,"

said Benjamin Schroeder, senior rates strategist at ING.

The yield on the benchmark U.S. 10-year Treasury note

was 7 bps higher at 3.848%, a sharp rebound from the

more than one-year low of 3.667% hit on Monday.

Last week's softer-than-expected U.S. job data stoked

worries among investors about a recession and led to a plunge in

stocks, with traders fleeing to safe haven assets.

Investors have also been grappling with a dramatic rally in

the Japanese yen which has rocked the country's markets and

rippled around the world.

Yields got a lift late on Monday after policymakers pushed

back on against the notion that soft job data means the economy

is in trouble.

The jobs data left "more room for confidence that we're

slowing but not falling off a cliff," San Francisco Fed

President Mary Daly said at an event in Hawaii.

Chicago Fed President Austan Goolsbee said: "You see

jobs numbers come in weaker than expected but not looking yet

like recession."

Goolsbee said the Fed is focused on employment, inflation

and financial stability. "If the conditions collectively start

coming in...that there's deterioration on any of those parts,

we're going to fix it," he said.

Traders are now anticipating 110 bps of easing this year

from the Fed, compared to more than 125 bps on Monday. They now

see a 75% chance of an outsized 50 bp cut in September, down

from a near certainty on Monday, money market pricing showed.

"We do not think that the U.S. economy - or Europe - is

headed for a hard landing," said Mohit Kumar, chief economist

for Europe at Jefferies.

"The aggressive market reaction over the last few

sessions was due to a combination of heavy positioning, unwind

of carry trades, summer illiquidity and geopolitical concerns."

The gap between two-and 10-year Treasury notes

was last at minus 12 bps, after reaching 1.50 bps

briefly on Monday. It was the first time it has turned positive

since July 2022.