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UPDATE 1-German bond yields edge up from 2-week lows as stocks stabilise

* Euro zone periphery govt bond yields tmsnrt.rs/2ii2Bqr (Adds details, comments)

AMSTERDAM, Sept 9 (Reuters) - German government bond yields edged up on Wednesday from two-week lows touched in earlier trade as global stock markets stabilised after the previous day’s rout.

A sell-off in high-flying U.S. technology shares, fuelled partly by concerns around excess purchases of call options, has increased the risk of a larger correction across other markets.

Yields on 10-year German bonds, viewed as a safe asset by investors, hit a two-week low of -0.508% in early trade but then edged up as European stocks and U.S. stock futures stabilised to trade at around -0.50%.

Risk sentiment remains fragile, however, taking a hit after AstraZeneca Plc paused a late-stage trial for one of the leading COVID-19 vaccine candidates due to an unexplained illness in a study participant.

“This is something which, if it turns into something bigger, if they find that this is a major setback for that particular trial, then it is something that would put some of the expectations of an ongoing economic recovery at risk,” said Mizuho head of multi-asset strategy Peter Chatwell.

“For the time being it’s more of a risk premium rather than something that can be really priced in.”

In the primary market, Germany sold 3.39 billion euros in a top-up of a 10-year bond, while Portugal raised 1.21 billion euros via 10 and 25-year bonds, all via auction.

With the U.S. Treasury also due to re-open a 10-year bond later in the session, Mizuho’s Chatwell said there may be some upward pressure on high-grade yields despite the risk-averse backdrop. Bond yields tend to rise as new debt is issued, with investors making room for new supply.

Analysts were also focusing on Thursday’s European Central Bank meeting. While no change is expected to the bank’s policy, its inflation forecasts and messaging around its willingness to deploy its bond purchases will be closely watched.

Italian bond yields, expected to be a beneficiary of any additional ECB stimulus, edged down, with the 10-year 5 basis points lower at 1.06%.

The closely watched risk premium paid by Italy over 10-year German bonds fell to 156 bps from Tuesday’s one-month highs . ($1 = 0.8495 euros) (Reporting by Yoruk Bahceli; Editing by Catherine Evans)

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