TREASURIES-Rise in Asia as JGB futures rally

*Trade quiet before this week's Fed policy meeting

*10-year notes edge higher as JGB futures rise

By Masayuki Kitano

TOKYO, June 23 (Reuters) - U.S. 10-year Treasury notes edged higher in Asian trade on Monday, getting a lift from a rise in Japanese government bond futures.

But trading was light ahead of the Federal Reserve's two-day policy meeting that starts on Tuesday, with investors awaiting clues on how much the Fed may raise interest rates later this year.

"Trading is pretty quiet because it's a Monday morning and since the Federal Open Market Committee meeting is coming up," said a senior trader for a U.S. brokerage house.

Treasuries drew some support from a rise in JGB futures 2JGBv1 and a fall in Tokyo share prices, he said. [JP/] The benchmark 10-year Treasury note rose 5/32 in price to yield 4.148 percent US10YT=RR, down around 2 basis points from late U.S. trading on Friday. The two-year note was unchanged in price for a yield of 2.896 percent US2YT=RR.

The Fed is widely expected to keep interest rates unchanged at 2.0 percent this week, and the focus will be on its post- meeting statement.

"Market players will start to debate in earnest, after the FOMC, whether the Fed is going to tighten because of inflation or if it is going to keep interest rates steady at current levels for a while," said the senior trader for a U.S. brokerage.

Treasuries suffered a sharp sell-off earlier this month and two-year yields saw their biggest weekly jump in 26 years, as Fed officials ramped up anti-inflation rhetoric and investors braced for a series of Fed rate hikes later this year.

But Treasuries have gained some reprieve in the past week, after a flurry of media reports suggested the Fed may not raise interest rates as aggressively as investors thought.

About a week ago, U.S. short-term interest rate futures showed that the market had been bracing for Fed rate hikes of around 75 basis points to 100 basis points this year, but investors have since scaled back such expectations. FEDWATCH

(Editing by Sophie Hardach)