Euro zone long-dated yields resume their grind higher

(Updates after morning trading)

LONDON, Aug 25 (Reuters) - Euro zone bond yields resumed their climb on Monday, reversing a U.S. Federal Reserve-driven fall from late last week as traders reassessed that move and any Fed impact on Europe, and processed data showing an uptick in German business morale.

Germany's 10-year bond yield, the benchmark for the euro zone, was up 5 basis points at 2.77%, heading back towards last week's near five-month top of 2.787%.

Germany's 30-year yield rose nearly 6 bps to 3.36% and was just a whisker off last week's 14-year high.

"The mild upward trajectory since June in long-end European government bond yields remains intact," said Kenneth Broux head of corporate research FX and rates at Societe Generale.

Longer-dated yields have been rising around the world as investors grow nervous over governments' high levels of debt, or in Germany's case, a large expansion in its borrowing. That trend saw a fairly rare interruption last Friday, as Fed chair Jerome Powell, in his final address as Fed chair at the Jackson Hole economic symposium, hinted at a September interest rate cut. While he stopped short of clearly committing to such a move, his comments were sufficient to spark a rally in stocks and U.S. Treasuries that also spilled over into Europe, sending German 10-year yields down around 4 bps.

However, yields' rising trend resumed on Monday, partly because the European Central Bank, which has cut rates by much more than the Fed so far this cycle, is now in a different place.

Remarks by ECB policymakers at Jackson Hole were "consistent with an extended pause," Jim Reid, global head of macro research at Deutsche Bank, said in a note. ECB President Christine Lagarde avoided discussing the policy outlook but highlighted the resilience of the euro area labour market.

U.S. Treasury yields also rose around 2 basis points across the curve as traders calibrated their positioning. Back in Europe, data on Monday that showed German business morale unexpectedly improved in August to its best level in 15 months further underpinned the rise in yields and offered a similar message to last week's upbeat business activity data.

That helps reduce the pressure on the ECB to cut rates again this cycle. Markets see a further cut this year as unlikely, though they do see a reasonable chance of a move by the early part of next year.

Italy's 10-year yield moved largely in line with Germany's, up nearly 6 bps to 3.61%.

Germany's two-year yield was up 3 bps at 1.98%, slightly steepening the country's yield curve. (Reporting by Alun John; editing by Mark Heinrich and Hugh Lawson)