(Updates for European afternoon trading)

LONDON, Feb 12 (Reuters) - German bond yields climbed

again on Wednesday after rising by their most in almost four

months the previous day as markets digested tariff developments,

comments from the U.S. Federal Reserve chair, and a rise in

energy prices.

The move was relatively muted as investors waited for U.S.

consumer price index inflation, due at 1330 GMT, which could

influence the Fed and have knock-on effects for Europe's bond

markets.

Germany's 10-year bund yield was last up 2 basis

points (bp) at 2.454%, the highest since Feb. 3, after rising 7

bps on Tuesday.

Investors were also bracing for more tariff announcements,

with U.S. President Donald Trump's trade advisers finalising

plans on Wednesday for the reciprocal tariffs he has vowed to

impose on every country that charges duties on U.S. imports.

Commerzbank's head of interest rates strategy Michael

Leister said U.S. inflation data, tariffs and heavy European

bond issuance should all continue to weigh on euro zone debt on

Wednesday.

"We stick with our short bias in bunds," he added.

It was set to be another day of heavy bond issuance in

Europe, with France and Germany among the countries coming to

the market.

Italy and the European Union both sold bonds via

syndications on Tuesday to strong demand, as Germany and the

Netherlands also issued debt.

Italy's 10-year yield was up 1 bp at 3.539%, and

the gap between Italian and German bond yields

narrowed 1 bp to 109 bps.

Germany's two-year bond yield, which is more

sensitive to European Central Bank rate expectations, was 3 bps

higher at 2.117%.

The U.S. data is expected to show inflation held steady at

2.9% in January, and month-on-month inflation slowed to 0.3%

from 0.4% in December.

Fed Chair Jerome Powell said on Tuesday the central bank was

in no hurry to cut rates again thanks to a strong economy.

Traders expect more rate cuts from the ECB this year,

reflecting a much weaker economy. Money markets last pointed to

around 78 bps of further cuts this year, down from around 88 bps

priced in on Monday.