TOKYO, Nov 17 (Reuters) - Japan's super-long dated

government bond yields climbed sharply on Monday as concerns

deepened over increasingly expansionary fiscal policy under

Prime Minister Sanae Takaichi, pushing the 20-year Japanese

government bond yield to its highest level in 26 years.

The 20-year JGB yield rose 3.5 basis points to 2.750%, its highest level since

August 1999.

The 30-year JGB yield rose 5 bps to 3.260%,

its highest point since October 7. The 40-year JGB yield

jumped 5 bps to 3.595%.

"We had data earlier today showing the nation's economy

fell, which drove expectations that the government would

increase spending to support growth," said Katsutoshi Inadome, a

senior strategist at Sumitomo Mitsui Trust Asset Management.

Japan's economy shrank almost 2% in the three-month period ended

September, as a drop in exports in the face of U.S. tariffs

resulted in the first contraction in six quarters, government

data showed on Monday.

Over the weekend, the Nikkei newspaper reported Japan is

considering spending around 17 trillion yen ($110 billion) in

new Prime Minister Sanae Takaichi's first stimulus package.

"The amount in the report was within the market

expectations. What investors care about now is that the spending

could become more than that," said Inadome.

A long-time advocate of late Prime Minister Shinzo Abe's

"Abenomics" stimulus policies, Takaichi has called for higher

spending and low low-interest-rate policy, saying Japan still

faces the risk of returning to deflation

The 30-year JGB yield started easing from a record high

scaled early October after Takaichi took a seat of the prime

minister, but it was on an upward trend this month as reports on

the stimulus package started appearing on media.

The 10-year JGB yield rose 3 bps to 1.730%,

its highest since June 2008.

The five-year yield rose 1 bp to 1.255%.

The two-year JGB yield rose 1 bp to

0.935%.

($1 = 154.6300 yen)

(Reporting by Junko Fujita; Editing by Sherry Jacob-Phillips )