(Updates with afternoon trading)

By Jaspreet Kalra

Sept 3 (Reuters) - Euro zone bond yields were set to

finish a volatile day lower on Wednesday, as the recent global

selloff eased with help from U.S. labour market data that

supported bets on a Federal Reserve rate cut this month.

Germany's 30-year yield rose to a 14-year high

of 3.4340% before reversing course, and was last down nearly 5

basis points on the day at 3.37%.

Other regional long-dated bond yields, including in France

and Italy, tracked their German

counterpart's moves, hitting multi-year highs before falling,

last down around 6 bps at 4.45% and 4.61%, respectively.

Similar moves were also seen in U.S. Treasuries and British

gilts, while Germany's benchmark 10-year yield was

last down nearly 5 bps at 2.74%.

Bond yields, especially long-dated ones, have been rising

sharply in recent days, before Wednesday's stabilisation.

Still, with worries about high debt levels in many

countries, unstable politics, and reduced demand from investors

like pension funds for long-dated debt, bond markets are not out

of the woods yet.

Investors are bracing for heavy bond supply in September and

October from Germany, Japan and the U.S., while also confronting

political worries in France and Japan.

French Finance Minister Eric Lombard said the minority

government would have to compromise on plans to cut the budget

deficit if Prime Minister Francois Bayrou is toppled in a

confidence vote on September 8.

"Structural weak demand is a theme across developed bond

markets," Sree Kochugovindan, senior economist at abrdn, told

the Reuters Global Markets Forum, adding that "in the near term,

the key risks will be political factors."

"In France, the no-confidence vote will be closely watched,

but a lot is priced in already," Kochugovindan said.

Wednesday's rally was given additional succour by U.S. data

that showed job openings fell more than expected in July and

hiring was moderate, consistent with easing labour market

conditions.

That supported expectations of a Federal Reserve rate cut

this month, and sent Treasury yields lower, a move which spilled

over to a degree to Europe.