TREASURIES-Foreign demand boosts prices after Friday selloff

* Bond buying by overseas investors pushes prices back up

* Prices fell Friday after Yellen's rate-hike remarks

* Solid U.S (Other OTC: UBGXF - news) . consumer spending boosts prospect of Fed rate

hike

(Updates to U.S. market close, adds analyst quote, details on

foreign bond yields)

By Dion Rabouin

NEW YORK, Aug 29 (Reuters) - U.S. Treasury prices rose on

Monday as foreign investors swooped in and bought Treasuries

following a market selloff Friday that took yields on benchmark

10-year notes to their highest since Britain's surprise vote to

exit the European Union in late June.

Comments from Federal Reserve Chair Janet Yellen and Vice

Chair Stanley Fischer on Friday, perceived as raising the

likelihood of the Fed boosting short-term interest rates this

year, spurred selling in Treasuries and provided an opening for

overseas investors seeking U.S. government debt, analysts said.

"Even (Taiwan OTC: 6436.TWO - news) though it looks like the Fed may tighten in September

and will probably tighten by December, people are still looking

at Treasuries saying, 'I like those yields,'" said Evercore ISI

strategist Stan Shipley.

Yellen said at a three-day gathering of world central

bankers in Jackson Hole, Wyoming, that the case for raising

rates had strengthened in recent months. In a later television

interview, Fischer said Yellen's remarks were consistent with

the possibility of two rate hikes this year.

Prices rose to new session highs in afternoon trading, which

Shipley attributed to continued interest from foreign buyers

during North American trading hours.

Benchmark 10-year U.S. Treasury prices rose

20/32 in price to yield 1.566 percent. The 30-year Treasury bond

rose 1-23/32 to yield 2.216 percent.

Yields for government debt in much of Europe are at or near

all-time lows and both German and Japanese government bonds hold

negative yields out to 10 years of maturity.

Monday's price action was exaggerated by light volumes with

many UK investors out for a bank holiday and many in the U.S.

out ahead of next week's Labor Day holiday. Others were

exercising caution before Friday's U.S. non-farm payrolls

report, said Lisa Hornby, U.S. fixed income portfolio manager at

Schroders (LSE: SDR.L - news) .

"Any moves that you're going to see are going to be

exacerbated by the fact that there aren't tons of people in the

office to take the other side of positions," Hornby (LSE: HRN.L - news) said.

Treasuries prices held gains after U.S. consumption and

personal income data matched economists' expectations for July.

Consumer spending, which accounts for more than two-thirds of

U.S. economic activity, increased for a fourth straight month in

July and was revised higher for June.

While that was supportive of rising inflation that could

point towards a Fed rate hike for the first time since December,

the data did not exceed expectations, meaning it should have

been priced in, Hornby said.

(Editing by Bernadette Baum and Nick Zieminski)