TOKYO, Nov 11 (Reuters) - Japanese government bonds gained on Thursday, with the market keen to see if a five-year debt auction the same day will allay recent concerns over Japan's fiscal situation that had sent the benchmark 10-year yield to a five-month high.

* The 2.4 trillion yen ($26.7 billion) five-year debt auction on Thursday is seen as a key test of investor demand.

* Fiscal concerns peaked earlier this week, with the benchmark 10-year JGB yield hitting a five-month high of 1.485 percent.

The government is looking to increase issuance to offset low demand for retail bonds, fund an expected tax revenue shortfall and help finance the country's spending plans for the next fiscal year.

* But JGBs rebounded sharply on Wednesday a day after a government show of concern over rising long-term rates.

* Bond market participants are approaching the five-year tender with care following a string of poorly received auctions over the past month such as last week's 10-year offering.

* "The market may have rebounded but the rise owes to gains in longer-dated maturities, which have recently been affected by yield-curve plays. The five-year auction thus needs to be approached on separate terms," said Tetsuya Miura, chief market analyst at Mizuho Securities.

* Market watchers are cautiously optimistic about the five-year sale as this maturity has generally enjoyed support from domestic banks flush with cash under the Bank of Japan's easy monetary policy.

* For Thursday's sale the MOF re-opened the 0.7 percent coupon No. 85 five-year JGBs sold two months ago. The tender results will be released at 0345 GMT.