* Global equity sell-off lifts demand for safe havens
Euro zone govt bond yields fall 5 to 6 basis points
* German Bund yield set for biggest one-day fall in two months
* Euro zone periphery govt bond yields http://tmsnrt.rs/2ii2Bqr (Updates prices)
By Fanny Potkin
LONDON, Feb 6 (Reuters) - Euro zone government bond yields tumbled on Tuesday, with Germany's 10-year bond yield set for its biggest one-day fall in two months, as a sell-off in world stocks drove investors into safe-haven debt.
Bond yields across the bloc fell 5 to 6 basis points, after rising to multi-year highs in recent sessions on expectations strong growth and a pick-up in inflation would encourage central banks to pull away from ultra-easy monetary policies.
However, a rout in world stock markets, with U.S. shares sliding more than 4 percent on Monday and Asian and European stocks following on Tuesday, arrested the sell-off in bonds for now. Worldwide, equities have lost more than $4 trillion in value since their peak in late January. Germany's 10-year bond yield, the benchmark for the bloc, fell as low as 0.671 percent, down 7 basis points on the day and was set to close the day at 0.69 percent, still well below Monday's more-than-two-year high of 0.774 percent.
U.S. 10-year Treasury yields fell from four-year highs to as low as 2.648 percent. Japanese government bond yields fell to their lowest in almost a month at 0.065 percent in European trade .
Both are seen, along with German Bunds, as safe havens.
"The normal crisis relationship between equities and bonds was restored yesterday," Deutsche Bank strategist Jim Reid said in a note.
A pan-European index of stocks hit its lowest level in six months at one stage and closed the day 2.4 percent lower.
"In the case of risk aversion, we might see support for core government bonds," said Mathias van der Jeugt, head of market research at KBC. "But over the long term the (bond) sell-off will continue because growth is strong, inflation is rising and central banks are heading towards policy normalisation."
In a speech on Monday, European Central Bank President Mario Draghi said the bank was increasingly confident that inflation would rise along with economic growth, but currency market volatility is a potential obstacle.
Also on Tuesday, Germany sold just over 800 million euros of inflation-linked bonds maturing in 2026, while Austria sold 700 million euros of five-year bonds.
An expected Greek sale of seven-year bonds did not happen on Tuesday against the backdrop of volatile world markets, sources close to the deal told IFR, a Thomson Reuters service.
(Reporting by Fanny Potkin, additional reporting by Dhara Ranasinghe; Editing by Janet Lawrence)