LONDON, May 30 (Reuters) - Italian government bond yields edged off multi-year highs on Wednesday, with one analyst attributing the moves to Italian investors using the opportunity to snap up cheap paper.
The yield on 10-year government bonds dropped 12 basis points on the day to 2.98 percent, coming off four-year highs of 3.38 percent.
The two-year government bond, the focus of recent selling, was down 33 bps at 2.095 percent, having hit its highest level in half a decade in early European trade.
“There’s a bit of dip buying so I guess it’s Italian investors buying, but have to watch out for what other investors do as the day progresses, especially U.S. investors,” said DZ Bank strategist Daniel Lenz.
The closely-watched Italy/Germany 10-year bond yield spread tightened 13 bps to 2.69 pct compared to Tuesday’s close of 283 bps. (Reporting by Abhinav Ramnarayan; editing by Sujata Rao)