LONDON: Italian government bond yields unwound earlier falls on Wednesday, dragging up Spanish yields in their wake as jitters returned to markets ahead of Spain's debt auction on Thursday.

Ten-year government bond yields were last 6 basis points higher at 5.54 percent, after reversing earlier falls.

Spanish 10-year yields were also pulled off the day's lowest levels. It was last down 1.8 basis points at 5.89 percent.

"The market is getting a bit nervous ahead of the Spanish auction again, it's trying to push bonds to the upper end of their recent range again," one trader said. "But it is really range-trading and little volumes."

Safe-haven Bunds extended gains with futures last up 46 ticks at 140.42.