JGB yields hit multi-year highs tracking US peers

TOKYO, Jan 8 (Reuters) - Japanese government bond yields rose to multi-year highs on Wednesday, pulled by climbing U.S. Treasury yields after robust economic data pointed to a slower pace of interest rate easing by the Federal Reserve.

The 10-year JGB yield JP10YTN=JBTC rose 3 basis points (bps) to 1.170% as of 0529 GMT, after earlier hitting 1.175% for the first time since July 2011.

The two-year yield JP2YTN=JBTC rose as much as 2.5 bps to 0.655%, a level last seen in October 2008.

The five-year yield JP5YTN=JBTC added as much as 3 bps to 0.815%, the highest since June 2009.

Overnight, long-term U.S. Treasury yields climbed to their highest since April after a report showed services sector activity accelerated in December, with a measure tracking input prices surging to a nearly two-year high, pointing to elevated inflation in the world's biggest economy.

Separately, Labor Department data showed U.S. job openings unexpectedly increased in November, although a softening in hiring pointed to a slowing labor market.

Traders now see the next Fed rate cut as most likely in June, with the U.S. central bank staying on hold for the rest of 2025, according to the CME FedWatch tool.

"I don't see the 10-year JGB yield going above 1.2% with speed as buyers will likely emerge," said Shoki Omori, chief Japan desk strategist at Mizuho Securities.

"Long-only investors were waiting for 10-year yields to reach 1.2%."

Benchmark 10-year JGB futures 2JGBv1 fell 0.29 yen to 141.31 yen. Prices move inversely to yields.

The 20-year JGB yield JP20YTN=JBTC rose 3 bps to 1.945%, the highest since July.

The 30-year yield JP30YTN=JBTC rose 2.5 bps to 2.335%, a level not seen since March 2010.

(Reporting by Kevin Buckland; Editing by Varun H K)

((Kevin.Buckland@thomsonreuters.com))