* Euro zone periphery govt bond yields http://tmsnrt.rs/2ii2Bqr
LONDON, Oct 24 (Reuters) - Europe's benchmark government bond yield edged back towards two-week highs on Tuesday ahead of economic data that could help convince investors that the European Central Bank is plotting a change to its ultra-easy monetary policy approach.
Analysts say strong business and bank lending surveys may provide more evidence that the ECB will announce a trimming of its monthly bond purchases at its Thursday meeting, although this should come with an extension of the scheme.
German 10-year yields rose 1 basis point on Tuesday to 0.45 percent, just shy of a two-week high of 0.46 percent struck on Monday and well above a five-week low of 0.35 percent reached on Oct. 17.
All other euro zone yields were 1-2 bps higher on the day.
"On the data front, flash PMI data and ECB bank lending survey should reveal whether the recent strong economic momentum in the euro zone has been sustained," said Padhraic Garvey, global head of debt and rates strategy at ING.
"Many pundits hold a bearish bias on rates and spreads going into the ECB meeting, suggesting it doesn't take much for Draghi to trigger a risk-on rally."
The bloc is enjoying the best growth momentum in a decade, and a monthly survey showed France's business rebound showed no sign of slowing on Tuesday.
Purchasing Managers' Index (PMI) readings for the bloc's biggest economy Germany and the whole euro area are due on Tuesday, as is the ECB's bank lending survey which is expected to show a continued trend of demand-driven loan growth.
Inflation remains the big headache for policymakers, however, which at 1.5 percent remains well below the ECB's target of almost 2 percent. Expectations are for it to stay that way at least until 2019.
Economists polled by Reuters expect the central bank to say on Thursday it will start cutting monthly purchases to 40 billion euros from 60 billion euros in January. They were split on whether the programme would last six or nine months after that.
For Reuters Live Markets blog on European and UK stock markets see: reuters://realtime/verb=Open/url=http://emea1.apps.cp.extranet.thomsonreuters.bi z / c m s / ? p a g e I d = l i v e m a r k e t s
(Editing by Jason Neely)