* Maturities of euro zone countries' debt http://bit.ly/2c2HQYH

By John Geddie

LONDON, Oct 25 (Reuters) - Austria's long-dated government bond yields held near 16-month highs on Tuesday as the country pushed ahead with plans to sell its first 70-year debt.

Vienna set initial price thoughts on the bond on Tuesday, according to IFR, as it also marketed a new seven-year debt to investors.

The country would join a raft of other euro zone countries that have tapped historically low rates and an investor hunt for yield to issue ultra-long dated bonds this year.

Italy, Spain, France and Belgium have all sold 50-year bonds this year, while Belgium and Ireland have also sold 100-year paper in private placements.

"It is safe to say that the length ... is a surprise to the market although we have flagged repeatedly since the start of the year the positive environment for long-dated supply," Mizuho strategist Peter Chatwell said.

Austria's 30-year bond yield held just above 1 percent on Tuesday, having climbed 6 basis points on the announcement of a possible deal on Monday. Yields were not far from 16-month highs of 1.09 percent hit earlier this month.

Its longest outstanding bond -- debt maturing in 2062 that was originally sold as a 50-year in 2012 -- also rose 6 basis points on Monday to 1.19 percent, and remained around those levels on Tuesday.

Yields tend to rise ahead of debt sales as investors make room in their portfolios for the new supply.

Analysts an ING expect Austria to issue around 1.5 to 2 billion euros of the new 70 year bond, given it was able to raise 2 billion euros in 2012 with a 50-year bond.

The trillions of euros the European Central Bank has spent trying to revive the bloc's low inflation outlook has pushed rates to record lows over the past year.

This has provided a golden moment for euro zone countries to extend the average maturities of their debt, and build up insulation against any future repayment crunch like the euro zone crisis.

Low rates have also seen a wide variety of investors buy up these ultra-long bonds, not just the institutional investors such as pension and insurance schemes which typically target them to get bulk up returns on their fixed income investments.

Some asset managers have purchased these bonds for the outsized capital gains they offer in case the euro zone is sinking towards a Japan-style decade of deflation.

Other speculators have bought them up betting that the ECB may add ultra-long debt to its asset-purchase stimulus scheme if it, as expected, it decides to continue quantitative easing beyond its scheduled end in March 2017.

For Reuters new Live Markets blog on European and UK stock markets see reuters://realtime/verb=Open/url=http://emea1.apps.cp.extranet.thomsonreuters.biz/cms/?pageId=livemarkets

(Editing by Jeremy Gaunt)