* U.S. CPI rises less than expected
* Rates futures price in lower chance of Dec rate hike
* Russia's Lavrov: Russia, China plan to defuse N. Korea crisis (Updates prices, adds comment)
By Gertrude Chavez-Dreyfuss
NEW YORK, Aug 11 (Reuters) - U.S. Treasury yields fell on Friday as softer-than-expected U.S. inflation data for July further eroded expectations of an interest rate hike by the Federal Reserve at its December monetary policy meeting.
Both benchmark U.S. 10-year note and 30-year bond yields, which move inversely to prices, dropped to six-week lows after the inflation data, while yields on two-year notes, considered the most sensitive to rate hike expectations, sank to an eight-week low.
Long-dated yields, however, edged higher from their troughs after Russian Foreign Minister Sergei Lavrov said there is a Russian-Chinese plan to defuse the potential conflict between the United States and North Korea.
North Korea and U.S. President Donald Trump have traded barbs after the Asian nation threatened a nuclear missile attack on the U.S. territory of Guam earlier this week.
"The last thing the markets want here is the tension between U.S. and North Korea," said Stan Shipley, a strategist at Evercore ISI in New York. "It's a situation with no good resolution even though most people are skeptical that Russia and China have a plan to defuse the situation."
Aside from North Korea, Friday's benign U.S. inflation data was a big mover in the Treasuries market.
The U.S. consumer price index edged up just 0.1 percent last month after being unchanged in June. Economists polled by Reuters had forecast the CPI rising 0.2 percent in July. Stripping out the volatile food and energy components, consumer prices gained 0.1 percent for a fourth straight month.
"Today's report doesn't fundamentally change the 'wait-and-see' approach at the Fed, who expect some additional soft prints before a projected rebound," said TD Securities in a research note.
"There are four more CPI prints between now and the December FOMC meeting and we expect the Fed to remain data dependent, if a touch more cautious."
In late morning trading, benchmark U.S. 10-year yields dropped to six-week lows of 2.182 percent after the data, compared with 2.211 percent late on Thursday. Ten-year yields were last at 2.213 percent.
U.S. two-year yields sank to an eight-week low of 1.314 percent, down from Thursday's 1.335 percent. Two-year yields last traded at 1.314 percent.
After the CPI data, rate futures priced in just a 36 percent chance of an interest rate increase in December, down from 54 percent a month earlier, according to the CME's FedWatch. (Reporting by Gertrude Chavez-Dreyfuss; Editing by Chizu Nomiyama and Meredith Mazzilli)