TOKYO, Nov 17 (Reuters) - Japanese government bond (JGB) yields dropped across the curve on Friday to multi-month lows, mirroring their U.S. Treasury peers as investors continued to search for appropriate JGB price levels weeks after the Bank of Japan (BOJ) tweaked its yield curve control policy.

The 10-year JGB yield declined 7 basis points (bps) to 0.715%, its lowest level since Sept. 19.

The fall comes in the wake of Treasury yields sinking near two-month lows overnight after U.S. weekly jobless claims rose more than expected. The benchmark 10-year yield was last hovering around 4.44%.

A weaker labour market, widely seen as a boost to the Federal Reserve's fight against inflation, aided sentiment that the Fed will not feel pressured to raise interest rates again.

The 20-year JGB yield fell 7.5 bps to around a one-and-a-half month low of 1.440%.

The 30-year JGB yield was down 7.5 bps to around a two-month low of 1.640%.

As expectations grow that U.S. Treasury yields may be peaking out, investors are re-evaluating the value of JGBs, Chotaro Morita, chief strategist at All Nippon Asset Management, said.

"I think there is also an element of correction to the undervaluation of JGBs" after Japanese yields jumped at the end of October, he said.

JGB yields rose to multi-year peaks around the BOJ October monetary policy meeting, when the central bank changed a 1% hard cap on long-term rates under its yield curve control policy to a reference point.

Bond prices and yields move inversely, with yields going up as the value of the bond falls.

"If U.S. yields are around 4.5%, for example, then an overall rate of 0.7% for the 10-year JGB yield is quite close to a fair level," Morita said.

On the short end, the five-year yield fell 4.5 bps to a one-month low of 0.310%, while the two-year JGB yield ticked down 2.5 bps to 0.030%, its lowest since Sept. 28.

(Reporting by Brigid Riley; Editing by Mrigank Dhaniwala)