* Risk of Fed surprise drives bonds and futures lower
* 2yr yield above 1%; 10y above 1.8%
SYDNEY, Jan 18 (Reuters) - U.S. Treasury yields rose along the curve in Asia on Tuesday, lifting the shorter end to new pandemic highs as traders braced for the possibility of a hawkish surprise from the Federal Reserve.
The Fed meets next week after a lead-in of fairly aggressive comments from officials highlighting the central bank's readiness to act in the face of stubbornly high inflation.
Two-year yields, which track short-term rate expectations, jumped nearly five basis points (bps) in Tokyo trade to cross 1% for the first time since Feb. 2020.
The move extended Friday's sharp sell-off, following a market holiday on Monday, and at 1.0176% the two-year yield is up more than 28 bps in January so far. Fed funds futures are priced for a hike in March and four hikes this year.
"There appears to be an outside chance that the Fed may want to act a tad more aggressively in the early part of the tightening cycle," said Eugene Leow, senior rates strategist at DBS Bank in Singapore in a note.
"This could come in the form of ending quantitative easing completely in January, instead of waiting till March. Back-to-back hikes (something not seen since the 2004-2006 hike cycle) may also come into play," he said.
Five-year yields rose 4.8 bps on Tuesday to 1.6076%, the highest since January 2020.
Benchmark 10-year yields were up about 2.8 bps to a two-year high of 1.8215%.
Further out on the curve 20-year yields rose 3 bps to 2.2201%, a more than seven-month high, and 30-year yields were also up 3 bps to a three-month high of 2.1580%. (Reporting by Tom Westbrook; Editing by Himani Sarkar and Kim Coghill)