* Euro zone periphery govt bond yields http://tmsnrt.rs/2ii2Bqr
By Dhara Ranasinghe
LONDON, Sept 24 (Reuters) - Germany's bond yields were a touch higher on Tuesday, a day after posting their biggest one-day fall since June as dismal business activity data fanned recession fears.
Focus turned to the release of the German Ifo business climate index for the latest clues on the euro zone's biggest economy, which has been battered by a bitter global trade war.
Analysts said that even a better-than-expected number may not overturn the scale of pessimism about the economic outlook after data on Monday's showed German private sector activity shrank for the first time in 6-1/2 years in September.
"The PMI numbers were devastating and what concerns us most is that so far we've had a recession of the industrial sector only but now it looks like the services sector is weakening too," said Daniel Lenz, a rates strategist at DZ Bank.
"It will be interesting to see if there is a negative surprise on the Ifo."
Economists polled by Reuters forecast the Ifo business climate index at 94.4 in September versus 94.3 in August -- its lowest level since 2012.
In early trade, most 10-year bond yields across the single currency bloc were 1-2 basis points higher on the day.
Germany's 10-year bond yield was up 2 bps at -0.57% -- holding close to more than one-week lows hit a day before. On Monday, it fell 6 bps in the biggest one-day fall since June 18, when a dovish speech by ECB chief Mario Draghi sent bond yields sharply lower.
A measure of confidence within French industry showed a slight dip in September compared with August, France INSEE national statistic office said on Tuesday.
It added that other measures of business confidence in France rose, as the euro zone economy battles against weak data pointing to a recession.
Some caution ahead of a key Supreme Court ruling related to the suspension of Britain's parliament later in the day supported demand for safe-haven assets.
(Reporting by Dhara Ranasinghe, editing by Louise Heavens)