TOKYO, Nov 21 (Reuters) - Benchmark Japanese government

bond yields (JGBs) retreated from a 17-year high on Friday as

the government prepared to announce details of a massive

economic stimulus plan.

The 10-year JGB yield fell 2.5 basis points

(bps) to 1.790%, down from as high as 1.835% in the previous

session, the highest since June 2008. It's set for an 8.5 bps

jump this week that would be the sharpest increase since

mid-August.

Super-long-term JGB yields surged to record levels on

Thursday as details about Prime Minister Sanae Takaichi's

stimulus plan spurred concerns about the nation's financial

health.

The package, due for release later on Friday, amounts to

21.3 trillion yen ($135.38 billion), a draft seen by Reuters

showed, and will be funded in part by increased government bond

issuance.

But the plan may not be as big a hit to Japan's finances as

feared, given the nation's quickening economic growth, while a

large share of the announced spending will come from recycled

funds, said Cameron Systermans, head of multi-asset in Asia for

investment consulting firm Mercer.

"I think a lot of the moves have potentially already

happened at the long end (of the JGB yield curve)," Systermans

said.

"Now with yields backing up to attractive levels, I think

it's getting where lot of asset owners, be they pensions or

insurers, are looking at switching from global back to Japanese

yields," he added.

In the seven weeks since fiscally dovish Takaichi won a

party election that set her on the path to become Japan's first

female premier, the yen has lost about 6% against the dollar and

the 10-year U.S.-Japan interest rate gap has narrowed about 11

bps.

The 20-year JGB yield slid 4.5 bps to 2.805%,

down from a quarter century peak.

The 30-year yield fell 5 bps to 3.325%, and

the 40-year yield sank 5 bps to 3.695%, both down

from unprecedented levels.