* Euro zone periphery govt bond yields http://tmsnrt.rs/2ii2Bqr (Recasts, updates prices, adds more info on bonds and latest news)
LONDON, Dec 4 (Reuters) - Euro zone government bond yields yo-yoed on Wednesday as mixed messages emerged from the United States and China on how soon they could reach a deal to end their nearly two-year trade war that has taken a toll on the global economy.
Washington and Beijing are moving closer to agreeing on the amount of tariffs to be rolled back in a phase-one trade deal, Bloomberg reported on Wednesday, citing sources.
This has pushed 10-year German Bund yields up 1 basis point to -0.337%. Yields across the euro area have followed suit, rising by 1 to 2 bps.
Irish 10-year government bond yields have also turned positive, having dived into negative territory for the first time since October the day before.
Yields in the United States were outperforming their European peers, with 10-year Treasury yields up 3.6 bps at 1.745%.
Earlier in the day, benchmark 10-year German government bond yields were trading nearly 2 bps lower at -0.362% as concerns grew of a protracted trade war after President Donald Trump had said he was in no rush to sign an agreement.
Trump said on Tuesday a trade deal with China might have to wait until after the U.S. presidential election in November 2020.
"The trend has been getting better in U.S.-China trade war," said Francesca Fornasari, head of currency solutions at Insight Investment. "We seem to be closer to some sort of a deal."
Traders are getting jittery as there are less than two weeks remaining until Dec. 15, when new tariffs on Chinese imports to the United States are set to take effect unless cancelled.
The U.S. House of Representatives passing a bill that would require the Trump administration to toughen its response to China's crackdown on its Muslim minority in Xinjiang has added fuel to the fire. China has threatened to retaliate, which could upset the trade negotiations going on between the two.
America's frustration with its position on the global trade scene has spread to Europe too, as a U.S. threat to impose duties of up to 100% on imports of champagne, handbags and other French products also remains in place, sparking comments about possible retaliation from France and other European Union members during a NATO summit in London.
On top of that, Commerce Secretary Wilbur Ross said on Tuesday the Trump administration has not ruled out imposing tariffs on imported autos.
"In this type of environment, we are inclined to think that core government bonds would outperform as investors seek their safety," said ING analysts in a note to clients, adding that "risk assets on the other hand seem more at risk."
Concerns that a trade deal could be pushed out to next year could act as a further headwind for riskier assets such as equities, and for the global economy, which is already struggling to gain traction while major central banks are reaching their limits in policy stimulus.