* Euro zone periphery govt bond yields tmsnrt.rs/2ii2Bqr May 20 (Reuters) - Euro zone government bond yields rose on Thursday, catching up with a rise in U.S. Treasury yields after the U.S. Federal Reserve hinted at a possible shift in policy. Minutes of the U.S. central bank’s April meeting released on Wednesday said a number of policymakers thought if the U.S. economy continued its rapid progress, it would be appropriate “at some point” to begin discussing tapering bond purchases. In the euro area, where bond yields tend to be closely correlated with U.S. Treasuries, yields ticked up in early trade, though by less than U.S. Treasury yields rose following the minutes. The German 10-year yield, the benchmark for the bloc, was up almost 2 basis points to -0.093%. Euro area bonds have underperformed U.S. Treasuries in April and May, with yields on the former rising as the bloc’s vaccinations accelerate, while a rise in U.S. Treasury yields that spooked markets earlier on in the year has lost steam. That has tightened the closely watched gap between 10-year U.S. and German bond yields to 176 basis points, from over 200 bps in early April. Although questions around when the European Central Bank will slow its pandemic bond purchases continued to weigh on bonds on Thursday, DZ Bank rates strategist Andy Cossor said “European investors will look at the ECB and know it is not in the same position as the Fed”. “All the recent policy talk from the ECB has not been in the same direction as the Fed, so European investors can be a bit more relaxed about the monetary policy outlook,” he added. After syndicated government bond sales - where investment banks sell the debt directly to end investors - put pressure on bond prices earlier in the week, Thursday’s supply is expected to be digested more easily. Spain is scheduled to auction up to 6 billion euros of bonds due 2024, 2028 and 2031, and France will raise up to 10.5 billion euros from bonds due 2024, 2027 and 2028, and up to 3 billion euros from inflation-linked bonds. “Overall the shorter maturity of today’s sales should lessen the pressure compared to the past day’s longer deals but absent warm words from ECB officials, the rise in yields should resume,” ING analysts said in a note to clients. ECB chief economist Philip Lane will speak at 0900 GMT, followed by its president Christine Lagarde at 1200 GMT. (Reporting by Yoruk Bahceli; Editing by Alexander Smith) Our Standards: The Thomson Reuters Trust Principles.