* Euro zone periphery govt bond yields tmsnrt.rs/2ii2Bqr (Adds Greek issue, updates prices) LONDON, May 4 (Reuters) - Euro zone bond yields fell on Tuesday, retreating from recent multi-month highs as volatility in stocks boosted demand for safe havens, giving bonds a respite from a recent heavy selloff. U.S. and European stock markets saw a sudden 0.5% drop in hefty volumes around 1130 GMT on Tuesday, leaving traders scratching their heads and referring to the episode as a “micro flash-crash”. The pan-European STOXX 600 index, which spent most of the morning trading unchanged, accelerated losses from that point and was down 1.3% at 1457 GMT. In New York, Wall Street shares opened lower and the Nasdaq index lost over 2%. The volatility lifted demand for safe-haven bonds, with U.S. and German government bond yields falling as their prices rose. “It appears like it was a stock market-led move but it’s not a satisfactory explanation,” said ING senior rates strategist Antoine Bouvet. The yield on Germany’s 10-year Bund was last down 4.2 basis points on the day at -0.244%, having trading steady for much of the morning session. It was down from roughly 13-month highs hit on Monday at -0.16%. Most other 10-year bond yields in the currency bloc were 2-4 bps lower on the day, also pulling back from recent multi-month highs. Bond yields across the bloc have risen in recent weeks on expectations that a pick-up in the pace of vaccination rollouts will help economic activity bounce back from the COVID-19 shock. German Bund yields rose almost 6 basis points last week in their biggest weekly jump in more than two months. Some signs that major central banks are in no rush to taper massive stimulus may have also supported debt markets for now. New York Fed President John Williams said late on Monday that the recovery so far is “not nearly enough” to prompt monetary policy tightening. Australia’s central bank left its key rates near zero for a fifth straight meeting on Tuesday and pledged to keep policy super loose for a prolonged period. even as the economy recovers at a rapid pace from the pandemic-led downturn. And in the euro zone, analysts said signs of a pick-up in European Central Bank bond-buying were positive for regional markets. Data on Monday showed 80 billion euros ($96 billion) worth of bonds was purchased under the ECB’s PEPP emergency stimulus scheme in April, the first full month after the higher pace was announced in March. That compared with 60 billion euros worth bought in February. ECB chief Christine Lagarde has suggested markets focus on the monthly numbers rather than weekly purchase figures, which can be volatile. Some remained downbeat on the bond outlook. “We continue to be bearish on European sovereigns and particularly Bunds because they remain extremely vulnerable to rises in U.S. Treasuries yields,” Saxo Bank chief investment officer Steen Jakobsen said in a note. Among euro zone issuers, Greece hired a syndicate of banks for a new five-year bond sale, according to a lead manager memo seen by Reuters. The memo said the deal is expected in the “near future”, a term that debt management offices usually use a day before a sale. ($1 = 0.8330 euros) Reporting by Dhara Ranasinghe; Additional reporting by Julien Ponthus; Editing by Philippa Fletcher and Mark Heinrich Our Standards: The Thomson Reuters Trust Principles.