Benchmark JGB yields rise to 17-year high on yen, fiscal concerns

By Rocky Swift and Junko Fujita

TOKYO, Nov 20 (Reuters) - Japanese government bonds (JGBs) continued their slide on Thursday, sending benchmark yields to a 17-year high, as concerns mounted over the nation's finances and the yen's depreciation.

The 10-year JGB yield JP10YTN=JBTC climbed 3 basis points to 1.795%, briefly hitting 1.8% earlier in the session, its highest level since June 2008.

A government ruling-party panel proposed on Tuesday compiling a supplementary budget exceeding 25 trillion yen ($159.34 billion) to fund Prime Minister Sanae Takaichi's stimulus plan. That would be much larger than the previous year's extra budget of 13.9 trillion yen.

The yen traded near a 10-month low against the dollar and a record low versus the euro.

"The 10-year yield rose this morning as a weak yen raised expectations for an earlier interest rate hike by the Bank of Japan," said Katsutoshi Inadome, a senior strategist at Sumitomo Mitsui Trust Asset Management.

"This means that yields across the curve are under upward pressure, with super-long yields on track to increase further on concerns about the country's worsening fiscal health," he added.

Japan's government will include temporary payouts to families with children in a planned stimulus package that will likely exceed 20 trillion yen, the Asahi newspaper reported on Thursday.

The two-year JGB yield JP2YTN=JBTC rose 2.5 basis points to 0.95%. The five-year yield JP5YTN=JBTC rose 4 basis points to 1.300%.

($1 = 156.9000 yen)