July 1 (Reuters) - German government bond yields held near the day's highs on Friday in volatile trade after euro zone inflation data hit another record high in June.
Euro zone borrowing costs fell earlier this week as investors scaled back expectations about future rate hikes after data on Wednesday showed Germany's inflation was cooling off.
But the bloc's inflation hit yet another record high in June, accelerating to 8.6%, higher than expectations of 8.4%.
Italian annual inflation also accelerated sharply to 8.5% well above the median forecast of a 7.8% year-on-year rise in a Reuters survey of analysts.
Germany’s 10-year government bond yield was up 1.5 basis points to 1.39% on the day after briefly rising to the day's high at 1.41% after the inflation data.
The 2-year yield, more sensitive to rate hike expectations held around 0.66%. (Reporting by Stefano Rebaudo, editing by) ;))