TOKYO, Nov 19 (Reuters) - Japanese government bonds

(JGBs) slid on Wednesday, sending benchmark yields to a 17-year

high, ahead of a debt auction that will test investor appetite

as Prime Minister Sanae Takaichi's administration prepares a

massive spending package.

The 10-year JGB yield rose 2 basis points

(bps) to 1.765%, the highest since June 2008. The yield on the

40-year JGB, Japan's longest tenor, hit a record high on

Tuesday.

A ruling-party panel proposed on Tuesday compiling a

supplementary budget exceeding 25 trillion yen ($160.86 billion)

to fund Takaichi's stimulus plan. That would be much larger than

the previous year's extra budget of 13.9 trillion yen.

"The clear upward trend in ultra-long-term interest rates

this week is likely driven not only by caution ahead of the

20-year auction but also by concerns about a further upward

revision in the scale of fiscal expansion," Mizuho Securities

chief bond strategist Noriatsu Tanji wrote in a note.

The Ministry of Finance is due to auction about 800 billion

yen in 20-year JGBs. The 20-year yield rose 1 bp

to 2.795% after touching the highest since 1999 in the previous

session.

The 30-year yield advanced 1 bp to 3.320%.

The two-year yield rose 1 bp to 0.93%.

($1 = 155.4100 yen)