* Eurosceptics Borghi, Bagnai to lead key committees
* Italian bond yields jump, stocks down almost 2 pct
* Euro briefly falls to lowest for nearly a year (Updates prices for close)
By Abhinav Ramnarayan and Danilo Masoni
LONDON, June 21 (Reuters) - Italy’s bond yields rose, its stocks fell and the euro briefly weakened on Thursday after the Italian government appointed two eurosceptics to head key finance committees in parliament.
Claudio Borghi and Alberto Bagnai, both from the far-right League, were picked to head, respectively, the Budget Committee in the lower house of parliament and the Finance Committee in the upper house Senate.
The appointments renewed market jitters about the new coalition government’s commitment to the single-currency bloc.
Both have repeatedly railed against EU budget restraints. Borghi has called for the issuance of short-term government bonds, known as mini-Bots, to pay companies and individuals owed money by the state - a move markets fear could mark a first step towards leaving the euro.
Italian Economy Minister Giovanni Tria reiterated that the government had no intention of leaving the euro, but his words did little to calm markets.
Two-year Italian bond yields jumped more than 30 basis points, while Italy’s stocks tumbled two percent.
“The fact that Italian bonds could sell off 30, 40 basis points in a blink of any eye on what we could say is minimal news, shows how they are becoming less investable,” said Patrick O’Donnell, an investment manager at Aberdeen Asset Management.
Italy’s 10-year government bond yield rose 18 basis points to a one-week high of 2.76 percent, dragging Spanish and Portuguese bond yields higher .
The closely-watched gap between 10-year bond yields in Italy and benchmark euro zone issuer Germany was its widest in a week at around 242 bps and almost 25 bps wider from where it stood late on Wednesday.
Italy’s FTSE MIB further extended losses and was on track for its biggest fall in nearly three weeks. The bank stocks index was down 2.4 percent, with Unicredit and Intesa Sanpaolo prominent fallers.
As presidents of parliamentary committees, Borghi and Bagnai have much less power than ministers. But they can guarantee a fast track for government legislation and slow down opposition amendments.
They have both repeatedly said the single currency project was a mistake.
Bagnai, an economics professor, wrote a book in 2012 called “The sunset of the euro,” which League leader Matteo Salvini has said helped form his own eurosceptic views.
“Though it’s not clear how prominent his role will be, his views on the euro are very clear, so there has been a backlash in the market,” said Mizuho strategist Antoine Bouvet.
Spain sold five billion euros ($5.8 billion) worth of debt, adding to upward pressure on bond yields in southern Europe.
But safe-haven German bonds benefited from the Italy selloff, with the benchmark 10-year Bund yield hitting a three-week low at 0.317 percent.
The euro briefly dropped to its lowest in nearly a year at $1.1508, but the single currency recovered as a weak U.S. business activity survey forced the dollar on the backfoot.
“Sometimes you have to trade and ask questions later. A spike in Italian yields would be reason enough to sell euros,” said Neil Jones, head of hedge fund FX sales at Mizuho.
Reporting by Abhinav Ramnarayan, Danilo Masoni, Tommy Wilkes and Helen Reid; Writing by Dhara Ranasinghe; Editing by William Maclean