* Report LDP likely to win outright majority spurs BOJ easing expectations
* 30-year JGB auction draws strong demand, triggering cascade of buying
* Yields seen staying under pressure for now
TOKYO, Dec 6 (Reuters) - Japanese government bonds gained on Thursday, with 10-year futures at a record high after media reports showed the main opposition party was likely to win a solid majority in the upcoming election, reinforcing expectations of bolder monetary easing.
The market got another boost after an auction of 30-year JGBs drew strong demand, helping the longest maturities to outperform sharply after weeks of underperformance on concerns aggressive money printing could lead to future inflation.
"Some people are saying that after futures broke record highs, the sky is the limit," said a trader at a Japanese brokerage firm.
Ten-year JGB futures rose 0.23 point in price to 145.22 , their largest gain in 2-1/2 months. The contract hit an intraday record high of 145.24.
Trade volume was heavy, with 64,642 contracts changing hands, the second largest this year and more than double the average daily turnover of around 26,800.
The rally was sparked initially by Japanese media polls showing that the conservative Liberal Democratic Party was likely to sweep to victory in the Dec. 16 election. The LDP's leader Shinzo Abe has made bolder easing by the Bank of Japan a pillar of his platform.
The news helped to push the five-year yield below its key resistance at 0.165 percent to 0.155 percent, a level not seen since June 2003, when it hit a record low of 0.145 percent amid the country's banking crisis.
Investors think any future easing is likely to involve further expansion of the BOJ's asset purchase programme, which it conducts on top of its 1.8-trillion-yen-a-month bond buying market operation.
With the central bank already committed to buying more than one trillion yen of bonds with up to three years to maturity every month in that programme, traders think the BOJ may include longer bonds if it expands the asset purchase scheme.
"There's a perception that the BOJ will have to extend the target of its asset purchase programme to five years, aside from whether it will do that this month or not," said a portfolio manager at a major Japanese bank.
Many market players have also expected the BOJ to take easing steps in its next policy meeting on Dec. 19-20.
SURGE IN LONGEST MATURITIES
The auction of 700 billion yen ($8.5 billion) 30-year JGBs drew strong bids, triggering another avalanche of buying and unwinding of steepening trades that became popular in recent week based on expectations of more BOJ easing.
The 30-year JGB yield dropped 6.0 basis points to a two-month low of 1.885 percent, its biggest daily fall since March 2011.
The spread between 10- and 30-year yields dropped to 119.5 basis points, slipping from 125.5 points set earlier in the week, which was its highest level since early 2008.
"The auction results were surprisingly strong...I suppose they were attractive to some investors as the spread was so wide," said Chotaro Morita, chief fixed income strategist at Barclays.
"Where the market is going from here obviously depends on the BOJ's policy but at least yields are likely to fall for the time being," he added.
The 10-year JGB yield fell 2.5 basis points to 0.685 percent , so far this year, the yield has fallen about 29 basis points from 0.98 percent. The 10-year U.S. Treasuries yield also fell about as much.
The market's mood is strong, but some analysts warn that JGB yields may have fallen too low, ignoring better-than-expected economic data in recent days.
Japan's industrial output in October rose 1.8 percent, data showed last week, despite economists' forecast of a 2.2 percent drop, raising hopes Japan may avert a recession.
"There are signs of improvement in the global economy and Japan's output seems to be on the mend. I think JGB yields are more likely to rebound than not," said Katsutoshi Inadome, fixed income strategist at Mitsubishi UFJ Morgan Stanley Securities.