TOKYO - Japanese government bond (JGB) yields rose on Thursday, as market participants grappled with wavering expectations that the Bank of Japan will deliver an interest rate hike this month.

The 10-year JGB yield was last up 1.5 basis points (bp) at 1.065% after sliding to a three-week low of 1.04% on Wednesday, while 10-year JGB futures slipped 0.18 yen to 143.98 yen.

"It seems like we're experiencing a rebound from yesterday," said Katsutoshi Inadome, a senior strategist at Sumitomo Mitsui Trust Asset Management.

"Yesterday, the view spread that there would be no rate hike due to media reports, but the thinking seems to have shifted back today to the possibility that there could be one."

Toyoaki Nakamura, considered one of the Bank of Japan's more dovish board members, said later on Thursday he was "not opposed to rate hikes" but the decision to raise rates this month should be data-dependent.

The remarks likely keep the chance of a rate hike at the BOJ's next meeting alive. Yields rose higher in response.

Expectations had been growing that the BOJ will hike rates at its Dec. 18-19 monetary policy meeting, buoyed by Governor Kazuo Ueda's comments in an interview with Nikkei newspaper that the timing of the next rate hike was "approaching".

But some media reports published on Wednesday suggested the BOJ may skip a rate hike this month, sending those expectations tumbling.

Markets now see about a 38% chance of a rate increase in December.

The two-year JGB yield rose 1 bp to 0.595%, while the five-year yield climbed 2.5 bps to 0.735%.

The 30-year JGB yield was up 1 bp at 2.285% after an auction for the bonds garnered decent demand.

The bid-to-cover ratio, a common measure of demand, came in at 3.46, up marginally from 3.44 in November.

The 20-year JGB yield rose 1.5 bps to 1.87%.

(Reporting by Brigid Riley; Editing by Varun H K)