TOKYO, Oct 19 (Reuters) - Japanese government bond yields rose to fresh decade highs on Thursday, tracking U.S. Treasury yields, as investors braced for the Bank of Japan's (BOJ) exit from its negative rate policy.

The 10-year JGB yield rose 3.5 basis points (bps) to 0.840%, its highest since July 2013.

The five-year yield rose as much as 2.5 bps to 0.370%, its highest level since May 2013 and last seen at 0.365%.

U.S. Treasury yields at long- and short-dated tenors hit 16-year highs during Asian trade, amid fears that Federal Reserve Chair Jerome Powell would strike a hawkish tone on Thursday as the economy remains strong.

The BOJ remains an outlier among a global wave of monetary policy tightening by central banks, but pressure for the BOJ to tweak its policy is growing as inflation stays above the central bank's target.

"The rises in JGB yields in today's session was a reflection of investors' bet that the BOJ will end the negative policy and adopt positive rates eventually," said Kentaro Hatono, a fund manager at Asset Management One.

Under its yield curve control policy, the BOJ guides short-term interest rates at -0.1% and the 10-year bond yield around 0%. It also has an allowance band of 50 basis points set either side of the yield target, as well as a hard cap of 1.0% adopted in July.

Japanese yields extended their climb even after the BOJ intervened in the previous session, offering to purchase bonds with maturities of five to 10 years and 10 to 25 years in an emergency bond buying operation.

"The Japanese yields were on the rise mostly because U.S. yields rose, so what the BOJ could do was limited," said Chotaro Morita, chief strategist at All Nippon Asset Management and president of Walls & Bridges.

"As long as the BOJ has a mandate to control the long-term yield at around 0.5%, it has to take some action if the yield approaches closer to 1%," Morita said.

The 20-year JGB yield rose 4 bps to 1.615%, its highest since September 2013.

(Reporting by Junko Fujita; Editing by Subhranshu Sahu, Elaine Hardcastle)