LONDON, June 4 (Reuters) - Euro zone bond yields rose

modestly on Wednesday having fallen the day before as benign

inflation data helped solidify expectations for a rate cut from

the European Central Bank.

Data on Tuesday showed consumer price inflation in the euro

area slowed to 1.9% last month from 2.2% in April, its first

time at or below the ECB's 2% target since October.

The ECB has cut interest rates seven times since last June

and another move is almost fully priced in for Thursday's

meeting.

Germany's 10-year yield, the benchmark for the

euro area, was last up 1.5 basis points (bps) at 2.52%. It fell

to its lowest since May 8 on Tuesday at 2.485%.

Germany's policy-sensitive two-year yield was

little changed at 1.78%, within its recent tight range.

The Dutch 10-year yield was up 2 bps at 2.738%

after the collapse of the Netherlands' government on Tuesday,

while Italy's 10-year yield, the benchmark for the

euro periphery, was steady at 3.5%.