Superlong JGB yields hover near two-decade highs on tariff jitters

TOKYO, April 15 (Reuters) - Longer-dated Japanese government bond yields hovered near two-decade highs on Tuesday as worries persisted about the potential economic fallout from U.S. President Donald Trump's aggressive tariff campaign.

Japan's yield curve has steepened sharply over the past two weeks, reaching a pitch not seen in about 14 years as the two-year JGB yield simultaneously declined on bets that the Bank of Japan (BOJ) will have to delay further policy tightening.

Meanwhile, superlong JGB yields were catapulted higher by both a leap in equivalent U.S. Treasury yields amid a broad sell-off in U.S. assets, and on signs that Japanese Prime Minister Shigeru Ishiba was preparing hefty fiscal stimulus that could include cash handouts and a cut in consumption tax.

"Bond investors are becoming very concerned about expansive fiscal policy," said Yunosuke Ikeda, head of Japan macro research at Nomura.

"Ishiba's stance has clearly shifted."

The 30-year JGB yield JP30YTN=JBTC stood at 2.825%, only slightly down from Monday's high of 2.845%, a level not seen since July 2004.

The 20-year yield JP20YTN=JBTC was at 2.415%, after hitting 2.345% in the prior session, although a first since July 2004.

Superlong yields were able to edge back slightly with Trump's reprieve on smartphone levies and later hint at similar relief for automobiles giving investors some breathing room.

However, the buying in 20-year debt in the morning affected demand at an auction of the tenor, leading to a relatively weak result.

Meanwhile, the two-year JGB yield JP2YTN=JBTC added 5 basis points (bps) to 0.63%, although that was only 9 bps off the nearly five-month low at 0.54% from Monday of last week.

The five-year yield JP5YTN=JBTC rose 7 bps to 0.88%. The 10-year yield JP10YTN=JBTC rose 2.5 bps to 1.36%.

Benchmark 10-year JGB futures 2JGBv1 fell 0.67 yen to 140.45.