Japan's long-dated bond yields rise as PM picks reflationists for key posts

By Kevin Buckland

TOKYO, Nov 7 (Reuters) - Japanese government bond yields ticked higher on Friday, led by longer-dated debt, as new Prime Minister Sanae Takaichi named advocates of expansive fiscal policy to posts at the government's top economic panel.

The 30-year JGB yield JP30YTN=JBTC rose 1.5 basis points (bps) to 3.1%, while the 20-year yield JP20YTN=JBTC added 1 bp to 2.62%.

Yields on the so-called superlong debt are set for their first weekly increase in four weeks as speculation about Takaichi's stimulus plans rekindles fiscal worries.

Former Bank of Japan Deputy Governor Masazumi Wakatabe and Dai-ichi Life Research Institute economist Toshihiro Nagahama - both advocates of fiscal stimulus - will join the Council of Economic and Fiscal Policy, the government said on Friday.

The 10-year JGB JP10YTN=JBTC was flat at 1.68% and the five-year yield JP5YTN=JBTC drifted 0.5 bp higher to 1.245%.

Both of those yields had fallen slightly early in the session, tracking overnight declines in U.S. Treasury yields. US/

The two-year JGB yield JP2YTN=JBTC - which is the most sensitive to monetary policy expectations - remained half a bp lower at 0.93%.

BOJ Governor Kazuo Ueda adopted a characteristically cautious tone after the central bank left interest rates steady last week, with traders now laying about 27% odds on a rate hike at next month's monetary policy meeting.

"Current JGB market catalysts have narrowed largely to fiscal developments and overseas interest rates," Mizuho Securities chief desk strategist Shoki Omori wrote in a note.

"Absent new catalysts before the December MPM, sentiment remains cautious."