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Germany's Bund yield hovers below six-month highs

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

LONDON, Dec 27 (Reuters) - Government bond yields across the euro area nudged lower on Friday, in listless, holiday-thinned trade.

News on Thursday that China is in close touch with the United States on signing a Phase 1 trade deal bolstered sentiment in world markets, keeping stocks near record highs.

Still, bond yields across the single currency bloc edged down as markets reopened after the Christmas holiday, reflecting a preference by investors to hold onto safe-haven bonds in illiquid markets.

In early Friday trade, 10-year bond yields in Germany , France and the Netherlands were just one basis point lower on the day.

The Germany Bund yield hovered at -0.26%, holding below six-month highs hit last week at around -0.21%. In southern Europe, Italian bond yields were broadly lower . (Reporting by Dhara Ranasinghe, editing by Louise Heavens)