Euro zone bond yields up as ECB says ready to act against coronavirus fallout

* Euro zone periphery govt bond yields

LONDON, March 3 (Reuters) - Euro zone government bond yields were a touch higher on Tuesday after the European Central Bank joined its U.S. and Japanese peers in indicating that it stands ready to protect the economy from the coronavirus outbreak.

With the virus spreading around the globe, governments and central banks are under pressure to support growth, which is suffering from travel restrictions, weakening demand, supply chain disruptions and a sharp market sell-off.

The ECB said on Monday it is ready to take "appropriate and targeted measures" to fight the impact of coronavirus. G7 finance ministers are expected to hold a conference call on Tuesday to discuss measures to deal with the economic impact, sources told Reuters.

Australia cut its benchmark interest rate to a record low on Tuesday, putting its central bank among the first in the world to ease policy to fight the economic fallout from the coronavirus.

The signals from major central banks bought some calm to rattled world markets, pausing a stunning rally in top-rated bond markets for now.

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In early Tuesday trade, most 10-year bond yields were around one basis point higher on the day but holding close to their lows in a sign that caution was still embedded in bond prices.

Germany's two-year bond yields, for example, hovered near more than five-month lows hit on Monday at around -0.83% . When a bond's price rises, the yield falls.

Ten-year Bund yields were little changed at -0.62% , but above six-month lows hit in the previous session at around -0.67%.

"These (central bank) elements could help lift market sentiment, and might lead to some upward correction in Bund yields at the long end, but we would still be cautious at this stage," analysts at UniCredit said in a note. (Reporting by Dhara Ranasinghe; Editing by Catherine Evans)

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