* Euro zone yields up 3-4 bps as US tax plan finally passes
Portugal's Centeno picked as new chair of eurozone fin mins
* Report links EONIA price jump to Greek bank lending
* Euro zone periphery govt bond yields http://tmsnrt.rs/2ii2Bqr (Updates prices, adds Brexit talks reaction)
By Abhinav Ramnarayan
LONDON, Dec 4 (Reuters) - Euro zone bond yields rose on Monday after the U.S. Senate passed a tax bill over the weekend, increasing the chances of more aggressive interest rate hikes there, while a key meeting of euro zone finance ministers was also in focus.
The finance ministers on Monday chose Portuguese Finance Minister Mario Centeno as their next chairman, EU officials said, in succession to Dutchman Jeroen Dijsselbloem.
He will take over chairing monthly meetings of the 19 eurozone finance ministers, the Eurogroup, which is the European Union's most powerful economic policy-setting body, in mid-January.
"His fiscal packages have involved less of tightening and emphasis on different areas where the tightening has fallen - less of a squeeze on pensions for example. What this means for the European budget we will have to wait and see," Investec economist Philip Shaw said.
Centeno will have a key role in coordinating efforts to deepen euro zone integration by establishing a euro zone budget and appointing a finance minister for the bloc.
He will also oversee the end of the third bailout program for Greece in August 2018.
Euro zone bond yields were up 3-4 basis points on the day after the U.S. Senate narrowly approved a tax overhaul on Saturday, moving Republicans and President Donald Trump closer to their goal of slashing taxes for businesses and the rich while offering everyday Americans a mixed bag of changes.
That move came after a sharp fall in yields on Friday on reports that Michael Flynn, a former Trump adviser, was prepared to testify that Trump directed him to make contact with the Russians when he was a presidential candidate.
"We had quite high valuations on European government bonds on Friday following the Flynn revelations, so Bunds had some catching up to do after the Senate passed the tax bill this weekend," said DZ Bank analyst Rene Albrecht.
Germany's 10-year benchmark government bond yield was 4 bps higher at 0.34 percent, above Friday's near three-month low of 0.29 percent.
British gilts, also up sharply higher on the day, pulled back from session highs on news that there was no agreement between the EU and Britain on Brexit after a meeting on Monday, according to a source.
A jump in Euro Over Night Index Average (EONIA) prices, a key overnight benchmark rate used by European banks to lend money to each other, was caused by the National Bank of Greece's lending money to fellow Greek banks, a Bloomberg report suggested.
"These are low credit banks so they pay higher rates, and given the average volume of trading is very low at 5.6 billion euros (a day), you can see how it would have an effect on the price," said Albrecht of DZ Bank.
He said EONIA prices were likely to stabilize this week.
By Friday, pricing was fixed at minus 0.291 percent, down from minus 0.241 percent on Thursday. (Reporting by Abhinav Ramnarayan; Additional reporting by Helen Reid and Dhara Ranasinghe; Editing by Richard Balmforth)