Japan's five-year bond yields rise ahead of first auction after PM Ishiba's resignation

By Rocky Swift

TOKYO, Sept 10 (Reuters) - Japanese five-year government bonds fell on Wednesday ahead of a sale of the securities, the first debt auction since the resignation of fiscally hawkish Prime Minister Shigeru Ishiba.

The five-year yield JP5YTN=JBTC rose 2.5 basis points (bps) to 1.120%. The 10-year yield JP10YTN=JBTC increased 2 bps to 1.580%. Yields rise when bond prices fall.

The Ministry of Finance will sell about 2.4 trillion yen ($16.28 billion) in five-year JGBs later in the day.

Yields on JGBs, particularly long-dated bonds, have surged of late due to global concerns about fiscal deficits and as pressure mounted on Ishiba from within his Liberal Democratic Party (LDP) to step down following a poor election showing in July.

Ishiba announced on Sunday that he would resign, setting up a leadership race within the LDP that will also determine Japan's next prime minister.

Among top contenders is Sanae Takaichi, a devotee of "Abenomics" policies of Shinzo Abe - Japan's long-time leader and former PM, who presided over massive stimulus and unprecedented monetary easing.

The two-year JGB yield JP2YTN=JBTC rose 2 bps to 0.855%.

($1 = 147.4200 yen)