TOKYO, Jan 23 (Reuters) - Japanese government bond (JGB)

yields rose on Thursday as market players braced for an expected

interest rate hike from the Bank of Japan (BOJ) at the

conclusion of its two-day monetary policy meeting this week.

The 10-year JGB yield ticked up 0.5 basis

point (bp) to 1.2%, while 10-year JGB futures fell 0.06

point to 140.96 yen.

Markets see a 95% chance that the BOJ will raise rates on

Friday after policymakers last week left a hike on the table and

U.S. President Donald Trump's inauguration passed without

upending financial markets.

With a 25-bp hike all but completely factored in, further

upward pressure on JGB yields will depend on any signals the BOJ

drops regarding the pace of future increases.

Many market players expect the BOJ to take a cautious,

gradual approach to future hikes and anticipate only two

increases in 2025.

BOJ Governor Kazuo Ueda is likewise seen taking a careful

tone when communicating the bank's future path if the BOJ raises

rates to avoid causing market turmoil, said Ryutaro Kimura, a

fixed income strategist at AXA Investment Managers.

"There remains a risk of a negative surprise for yen

interest rates and renewed upward pressure if, contrary to

investor expectations, Governor Ueda takes a more positive

stance on further rate hikes," he said.

The BOJ last increased interest rates in July. That move,

along with concerns about the state of the U.S. economy, took

traders by surprise and triggered a rout in global markets in

early August.

The two-year JGB yield and five-year yield

each rose 0.5 bp to sit near recent highs at

0.695% and 0.875%, respectively.

On the super-long end, the 20-year JGB yield

climbed 1 bp to 1.895%, while the 30-year JGB yield

was flat at 2.25%.

(Reporting by Brigid Riley; Editing by Subhranshu Sahu)