UPDATE 1-Patient Fed takes sting out of euro zone bond rout

* Centrist Kaplan urges slow approach on rate hikes

* Data to show core U.S. inflation unchanged

* German bond yields fall from 18-month high

* Euro zone periphery govt bond yields http://tmsnrt.rs/2ii2Bqr (Updates prices, adds ECB story)

LONDON, July 14 (Reuters) - Euro zone bond yields fell on Friday, taking their cue from the patient approach of top U.S. policymakers on interest rate hikes ahead of inflation data in the world's largest economy.

The centrist Dallas Fed President Robert Kaplan advocated late on Thursday a go-slow approach on further hikes which chimed with Fed chair Janet Yellen's comments on Wednesday that rates would not go "all that much further".

These cautious signals have taken the sting out of a sell-off in the bloc's bond market that has been gathering steam over the past few weeks on rising expectations that the European Central Bank is set to wind down its asset purchase programme.

"They (Fed comments) add to our conviction that no further Fed hike should be expected for the rest of the year, which should prove reassuring for markets concerned about excessive tightening risk globally," Mizuho's head of euro rates strategy Peter Chatwell said.

Money markets pricing suggests less than a 50 percent chance of a hike over the next year, according to CME's FedWatch tool.

Meanwhile, a Reuters poll of economists released on Friday showed that the ECB is likely to wait until September before announcing a shift away from its ultra-easy policy, while a move at the July meeting next week is seen as too close to call.

Reuters reported exclusively on Friday that the ECB is keen to keep its asset purchases open-ended rather than setting a potentially distant date on which bond-buying will stop, an approach to retain flexibility in case the outlook sours.


The fall in euro zone yields tracked a move lower in U.S. equivalents which came after Kaplan - who is usually fairly centre-ground on monetary policy - made his comments late on Thursday.

Doves and Hawks: A look at where U.S. Fed officials stand on interest rate hikes http://fingfx.thomsonreuters.com/gfx/rngs/USA-FED/010021SN4EG/index.html

The bloc's benchmark German 10-year yield fell some 3 basis points when European trading started on Friday to 0.50 percent, moving away from an 18-month high hit earlier this week of 0.583 percent.

All other euro zone yields were down 2-6 bps on the day. U.S. Treasuries extended the fall that started on Thursday afternoon and were down 2 bps on the day at 2.33 percent .

The final major event of the week for investors is U.S. inflation data due for release later on Friday, although expectations remain muted.

The core consumer price index (CPI) is forecast to have risen only 1.7 percent year-on-year in June, the same as May's rate. On a month-on-month basis, the core CPI is expected to rise 0.2 percent after a 0.1 percent gain in May.

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(Reporting by John Geddie; Editing by Andrew Heavens)