Euro area bond yields edge up from multi-week lows

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Impact of US tariffs still uncertain

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US jobs data on Friday could provide clues on Federal Reserve moves

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Long-awaited French budget set to get approval

(Updates with BoE rate decision, latest price moves)

By Stefano Rebaudo

Feb 6 (Reuters) - Euro area government bond yields edged higher on Thursday as traders weighed concerns about U.S. tariffs and their impact on European Central Bank monetary policy, while the Bank of England lowered rates as expected.

Euro zone borrowing costs hit multi-week lows on Wednesday due to concerns that threatened U.S. tariffs could have a deflationary effect on the European economy and prompt the ECB to deepen its easing cycle.

Germany's 10-year bond yield, the benchmark for the euro zone bloc, rose one basis point (bp) to 2.37% on Thursday after hitting 2.345% the day before, its lowest since January 2.

Investors have focused more on economic data since U.S. President Donald Trump paused the announced tariffs on Canada and Mexico. U.S. job figures on Friday could provide more clues on the Federal Reserve policy path.

"The outcome for Europe remains uncertain," said Rune Thyge Johansen, an economist at Danske Bank, referring to possible U.S. tariffs on imports from Europe.

"We anticipate a limited short-term growth impact in the euro area. Yet, the risks are clearly tilted toward a more negative effect as tensions could escalate."

Some analysts said any demand shock facing euro zone exporters in the event of higher U.S. tariffs was likely to be more significant than the inflationary effect of retaliatory tariffs should the European Union respond.

Money markets priced in an ECB deposit facility rate at 1.91% in December from 1.85% on Wednesday.

Germany's two-year bond yield, more sensitive to ECB rate expectations, was largely unchanged at 2.053%.

The yield spread between OATs and Bunds - a market gauge of the risk premium investors demand to hold French debt - was at 71.1 bps after French Prime Minister Francois Bayrou on Wednesday survived two no-confidence votes in parliament, meaning a much-delayed 2025 budget seen as essential to cutting France's crippling debts can be adopted.

The gap hit 69.60 bps on Wednesday, its tightest level since October 31. It widened to around 90 bps, its highest since 2012, in mid-January and end-November in response to fears that France would be unable to cut its growing budget deficit.

Italy's 10-year yield rose 0.1 bps at 3.438%, and the spread between Italian and German yields stood at 106.5 bps.

The Bank of England on Thursday cut interest rates by a quarter point. Some policymakers had wanted a bigger move to offset a slowdown, but the BoE said it would be careful about further moves given an expected inflation spike and global economic uncertainty.

Britain's 10-year gilt yields rose 4 bps to 4.476%, after earlier falling to their lowest since December 13 at 4.38%. (Reporting by Stefano Rebaudo, additional reporting by Lucy Raitano; Editing by Mark Potter and Barbara Lewis)