By Kevin Buckland

TOKYO (Reuters) -The yield on two-year U.S. Treasury notes rose to a 17-year high of 5.1970% on Thursday, a day after the Federal Reserve held interest rates steady but stiffened its hawkish stance for future policy.

The 10-year yield rose to 4.4310%, a new 16-year peak.

The U.S. central bank projected a further rate increase by the end of the year and expected monetary policy to be significantly tighter through 2024 than previously thought.

Fed Chair Jerome Powell's "cautious view that a 'soft landing' is not even the base case may reflect the uncertainties of policy lag, especially alongside the possible need for more tightening," Mizuho analysts wrote in a client note.

"Against this backdrop the case for higher front-end yields, with distinct upside bias to yield volatility may persist into Q3 and early Q4," ahead of the next policy meeting in November, they wrote.

Money market traders now see better than 50% odds of a quarter-point hike by year-end, from around 40% probability before the Fed decision.