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UPDATE 1-German five-year bond yields turn positive, first time since 2015

* German 5-yr yields hit 0.004 pct, highest since late 2015

* Knot: ECB should be clear on ending QE after Sept

* UST yields at new highs

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

LONDON, Jan 29 (Reuters) - Five-year German bond yields turned positive for the first time since late 2015 on Monday and yields across the euro area hit fresh highs after a European Central Bank policymaker said the ECB should clarify how it will end its asset purchases.

Klaas Knot, who heads the Dutch central bank, said on Sunday the ECB should make clear how it will end its asset purchases as soon as possible after the current bond buying programme ends in September.

The comments, together with a sell-off in U.S. Treasuries, cemented a bearish tone in bond markets, which have been hit in recent weeks by growing expectations that major central banks are moving closer to unwinding the extraordinary stimulus that has underpinned low borrowing costs for so long.

In Germany, the euro zone's biggest economy, five-year borrowing costs rose to a high of 0.004 percent, briefly turning positive for the first time in more than three years. They were last trading at minus 0.01 percent.

Germany's 10-year bond yield rose to a two-year high at 0.598 percent, while two-year bond yields hit their highest since June 2016 at minus 0.51 percent.

Across the euro area, 10-year bond yields were up 2-3 basis points on the day, with French and Dutch yields climbing to their highest since last July.

"The Knot comments are a factor behind the sell-off in bonds today," said DZ Bank rates strategist Andy Cossor. "There's also the sell-off in U.S. Treasuries."

The 10-year Treasury yield rose to 2.708 percent , its highest level since early 2014, while two-year Treasury yields rose to 2.148 percent -- their highest since 2008.

Comments from the Bank of Japan governor on Friday that inflation is finally close to reaching its target added to a sense of a turnaround in policy among major central banks.

The ECB meanwhile surprised markets by striking a modestly dovish tone last week in the face of a robust euro, leaving German bond yields with a sixth straight week of weekly rises on Friday.

"Bunds remain vulnerable as euro zone QE jitters linger and U.S. risks line up," Commerzbank said in a note.

(Reporting by Dhara Ranasinghe; Editing by Catherine Evans)