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UPDATE 1-German bond yields hit 2-week highs as euro zone CPI looms

* Euro zone periphery govt bond yields http://tmsnrt.rs/2ii2Bqr

LONDON, Nov 30 (Reuters) - Borrowing costs in Germany, the euro zone's benchmark bond issuer, rose to their highest in just over two weeks on Thursday as investors braced for data expected to show a pick up in inflation across a booming single currency bloc.

Sentiment across bond markets in the region was defensive a day after heavy selling sparked by stronger-than-expected German inflation numbers, further signs of strength in the U.S. and European economies and a sell-off in British gilts.

November euro zone consumer price inflation data released later on Thursday could provide the next cues for a bond market, anxious that any signs of inflation moving towards the European Central Bank's near two percent inflation target could encourage the bank to step back further from its ultra-loose policy.

Analysts polled by Reuters expect a flash estimate to show inflation in the bloc rose 1.6 percent in November from a year earlier, up from 1.3 percent in October.

The core measure, which excludes food and energy prices, is expected to rise by one percent from 0.9 percent last month.

"The positive growth dynamics in Europe have so far failed to generate enough price pressure to give the ECB confidence that it is near fulfilling its mandate," said Mizuho rates strategist Antoine Bouvet.

"We expect that, in the coming months, core inflation will regain importance in the ECB's forward guidance with the central bank signalling that even as the phase of net asset purchases draws to an end, it is unlikely to raise policy rates until underlying inflation picks-up."

The ECB should shut the door on its monthly asset purchases next September, according to a majority of economists in a Reuters poll, but they were split on whether it would.

Most believe it will stop by the end of next year with a small number saying mid-2019.

Euro zone bond yields were up 1-2 basis points on the day.

German Bund yields rose to 0.403 percent, the highest in just over two weeks. They rose over five basis points on Wednesday in the biggest one-day jump in almost three weeks.

That puts Bund yields on track to end November with a monthly rise of just almost four basis points -- reversing some of last month's sharp falls.

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

(Reporting by Dhara Ranasinghe, Editing by WIlliam Maclean)