* Geopolitical, debt ceiling concerns in focus
* Strong U.S. economic data keeps December rate hike on table
NEW YORK, Aug 30 (Reuters) - U.S. Treasury yields held near nine-month lows on Wednesday as concerns about rising tensions with North Korea kept a bid for the bonds, and offset data that showed solid economic momentum. "Geopolitical events are really the focus, combined with the unfolding drama here with Washington, said Ian Lyngen, head of U.S. rates strategy at BMO Capital Markets in New York. I struggle to think that anyone is going to want to go home short the Treasury market into the holiday weekend. President Donald Trump on Wednesday said "talking is not the answer" to the tense standoff with North Korea over its nuclear missile development, but his defense chief swiftly asserted that the United States still has diplomatic options. The comment comes a day after Pyongyang fired a ballistic missile over Japan, which sent benchmark 10-year Treasury yields as low as 2.086 percent on Tuesday, the lowest since Nov. 10.
The 10-year notes were last down 3/32 in price
to yield 2.145 percent, up from 2.136 percent on Tuesday. Concerns about geopolitical tensions and demand for bonds to balance portfolios for month-end extension is expected to support bond prices this week. Investors are also nervous about the prospect of a government shutdown, and potential debt default, if lawmakers dont raise the nations debt ceiling by the end of September. Trump will address tax reform on Wednesday in a speech expected to tout tax cuts as a way to help workers and the middle class. Expectations that the Trump administration will overhaul taxes, potentially boosting growth, have faltered in recent months as lawmakers have been unable to pass healthcare and other legislation. Data on Wednesday showed economic strength and kept alive the possibility that the Federal Reserve will raise interest rates again at its December meeting. Gross domestic product increased at a 3.0 percent annual rate in the April-June period, the strongest since the first quarter of 2015. U.S. private employers also added 237,000 jobs in August, the biggest monthly increase in five months, beating economists' expectations. Personal income figures on Thursday and Fridays employment report for August are the next major U.S. economic releases. Investors are also evaluating whether Tropical Storm Harvey is likely to have a lasting impact on the U.S. economy after bringing catastrophic flooding to Texas.
(Editing by Chizu Nomiyama)