TOKYO, Dec 20 (Reuters) - Japanese government bond

yields dropped to the lowest in a month on Friday, a day after

Bank of Japan Governor Kazuo Ueda surprised markets with his

very cautious tone on further policy tightening.

The five-year JGB yield dropped as much as 3

basis points (bps) to 0.68% for the first time since Nov. 13.

The 10-year JGB yield dropped as much as 5

bps to 1.03%.

The yield on the newly issued two-year JGB

fell as low as 0.555%, the lowest since Nov. 20.

After maintaining policy status quo on Thursday, Ueda said

in his news conference that the central bank will require

"considerable time" to gauge the trend in wage increases and

that "considerable uncertainty" remains around the outlook for

the U.S. economy.

Following those comments, Nomura revised its call for a rate

hike in January to the following meeting in March, with analysts

saying Ueda "sounded more dovish than we expected".

Economists at Morgan Stanley MUFG Securities said, "We had

the impression that a rate hike in January is quite possible,

though his comments did not sound very hawkish in contrast to

our prior expectations."

Superlong JGB yields also fell, but by smaller margins. The

20-year yield declined 3 bps to 1.845%, and the

30-year yield lost 2 bps to 2.25%.

Benchmark 10-year JGB futures were up 0.45 yen at

142.59 yen, as of 0153 GMT. Bond prices and yields move

inversely.

(Reporting by Kevin Buckland; Editing by Subhranshu Sahu)