Feb 20 (Reuters) - Euro zone government bond yields

stabilised on Thursday, after rising for four days, as markets

awaited more clarity around the prospects of increased defence

spending in Europe.

Traders also assessed minutes from the U.S. Federal

Reserve's January policy meeting, published on Wednesday,

showing that Fed officials discussed slowing or pausing the

ongoing drawdown of its balance sheet holdings. This sent U.S.

Treasury yields down.

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

the euro zone bloc, held steady at 2.55%. On Wednesday the yield

touched its highest since January 30 at 2.555%.

Yields move inversely to prices.

Italy's 10-year yield was unchanged at 3.636%,

and the gap between Italian and German yields

stood at 107.8 basis points (bps).

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

sensitive to European Central Bank rate expectations, fell 0.5

bps to 2.17%.