*

BOJ governor says time needed to gauge wage, U.S. economy

outlooks

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Yen sinks to five-month low as traders doubt January hike

*

Ueda news conference came after stock markets had closed

with

moderate losses

(.)

By Kevin Buckland

TOKYO, Dec 19 (Reuters) - The yen plunged to its weakest

against the dollar in almost five months on Thursday and

Japanese government bond yields flipped to declines after Bank

of Japan Governor Kazuo Ueda was non-commital on the timing of

the next interest rate hike.

The yen sank as much as 1.3% to reach 156.78 per dollar for

the first time since July 23, with Ueda saying it will require

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

that "considerable uncertainty" remains around the outlook for

the U.S. economy and the policies of the incoming Donald Trump

administration.

"The market's expectation seems to be that a rate hike at

the January meeting is unlikely, as it would not coincide with

the spring wage negotiations," said Shoki Omori, chief Japan

desk strategist at Mizuho Securities.

"The Bank of Japan seems to consider that a January rate

hike is not off the table, but the market may not share this

view," he said. "This is particularly because the market is

aware of the Bank of Japan's cautious stance on the overseas

economy."

Benchmark five-year JGB yields were down 1 basis point at

0.705% as of 0746 GMT following Ueda's comments, after earlier

being up 4.5 bps at 0.76% for the first time since mid-2009.

Other maturities had yet to trade following the news

conference, which began just as Japanese equity markets closed.

The Nikkei finished the day down 0.69% at 38,813.58, paring

early losses after the BOJ left policy settings unchanged, even

though the outcome was widely expected.

"The BOJ likely decided to give it a miss, judging that it

would be fine to wait and confirm the trends for another month,"

said Takumi Tsunoda, senior economist at Shinkin Central Bank

Research Institute.

"But in any case, the conditions for another hike are being

met: Japan's inflation is on a slight upward trend and import

prices are again beginning to rise a bit."

Japanese yields began Thursday's session by tracking a sharp

overnight rise in U.S. yields the U.S. Federal Reserve signalled

a slower pace of easing next year.

A sell-off on Wall Street also weighed on Japanese equities.

Japan's rate-sensitive real estate sector was the worst

performer on the Nikkei, while financials was the only sector to

rise.