UPDATE 1-Sell off in euro zone govt bonds resume, yields push higher

* Euro zone bond yields up 3-6 bps

* Italian 10-year bond yields at 2 month peak

* U.S. 10-year Treasury yields at 9-month high

* U.S. tax overhaul nears completion (Adds quote, background)

LONDON, Dec 20 (Reuters) - Euro zone government bonds sold off sharply on Wednesday for a second straight day as a major U.S. tax overhaul neared completion, putting upward pressure on U.S. Treasury yields.

Government bond yields -- which move inversely with the price -- have risen sharply this week in both U.S. and Europe as a U.S. President Donald Trump's flagship tax overhaul package nears an end.

In addition, analysts believe many traders are closing out positions as the year comes to a close, exacerbating the move in yields.

"This is essentially the final trading week of the year so it is no surprise that there is a clearing out of positions in the bond market," said Orlando Green, European fixed income strategist at Credit Agricole.

"We've had a technical shift and that could last another day or two."

The yield on 10-year U.S. Treasuries hit a nine-month high of 2.49 percent, pushing euro zone counterparts higher.

Italian debt led the losses in the single currency bloc, with the yield on Italy's 10-year government bond rising 6 basis points to a two-month high of 1.95 percent.

Most other euro zone bond yields were up 3-5 bps. The yield on Germany's 10-year Bund, the benchmark for the bloc, was up 3 bps at a one-month high of 0.41 percent.

Bond yields in Germany, the euro zone's biggest economy, jumped on Tuesday after the country announced an increase in 30-year bond issuance for 2018. That sell-off spread to the rest of the euro zone and gathered pace as U.S. bond yields rose. (Reporting by Abhinav Ramnarayan and Dhara Ranasinghe; Editing by Keith Weir)