* 10-yr futures end lower for fourth straight session
* 10-yr, 20-yr yield spread rises to match last week's high
By Lisa Twaronite
TOKYO, Nov 22 (Reuters) - Japanese government bonds slipped on Thursday, with futures dropping for the fourth straight session, as growing expectations of aggressive stimulus by a likely new government continued to pressure the yen and push up equities, weighing on bonds.
Main opposition party leader Shinzo Abe, likely Japan's next prime minister, has called on the Bank of Japan to adopt interest rates of zero or below zero, which led to selling of longer maturities and caused the yield curve to steepen.
"Last week's trend of rising yields is continuing, and has room to continue, on expectations that Abe will continue to push for more easing," said Tomohiro Miyasaka, an analyst at Credit Suisse in Tokyo.
If the U.S. Federal Open Market Committee takes further steps at its next meeting on Dec. 11-12, this would put external as well as internal pressure on Japan's central bank to muster action of its own, Miyasaka said.
The 10-year JGB futures contract ended down 0.02 point at 144.54, down for the fourth straight session and moving away from a nine-year high of 144.73 hit on Friday.
In cash trading, yields on 10-year notes rose half a basis point to 0.735 percent.
The yen fell to a 7-1/2-month low versus the dollar on Thursday, shedding about 4 percent in the past week and a half. That helped lift the Nikkei share average to a 6-1/2 month closing high.
Compared to these dramatic moves, Japan's benchmark yields remain well below this month's high of 0.785 percent hit on Nov. 1. They last traded above 0.800 percent in late September, and are still closer to their nine-year low of 0.720 percent hit in July.
"The forex markets and stock markets are reacting to the Japanese political situation, but the reaction in the bond market has been understated by comparison, with many investors sidelined until next month's election," said a fixed-income fund manager at Japanese asset management firm.
"We see the bond market reaction mostly at the long end," he added.
The spread of 20-year yields over those on 10-year notes rose to 95.5 basis points on Thursday a last-traded basis, matching Friday's level which was the highest since July 1999.
Yields on 20-year debt rose 1 basis point to 1.685 percent on Thursday, while 30-year yields added half a basis point to 1.950 percent.
The ruling party is expected to lose support to the main opposition Liberal Democratic Party in the Dec. 16 election. On Wednesday, the LDP revealed a platform calling for a big extra budget and a policy accord with the Bank of Japan for aggressive monetary stimulus.
Open interest on the benchmark JGB futures contract this week has risen to its highest levels since early June, which suggests market participants are building up positions ahead of the election.
The BOJ held off on any additional monetary steps at its latest policy meeting on Tuesday, as expected.
Japanese markets will be closed for a holiday on Friday.