Single and double polarization observables for kaon photoproduction on the deuteron are studied theoretically with modern hyperon-nucleon forces. The kinematical region of the kaon scattered forward with large momentum is thoroughly investigated where either the quasifree scattering leading to the kaon and hyperon or the final-state interaction between hyperon and nucleon are expected. The quasifree scatterings show characteristic peaks in the inclusive cross sections. The final-state interaction effects are significant, especially around the ΛN and ΣN thresholds. The double polarization Cz is found to be sensitive to the final-state interaction effects. Precise data would help to clarify the property of the ΛN-ΣN interaction and also help to extract the information on the elementary amplitude from the quasifree scattering region.