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Euro zone bond yields hold ground as markets calm

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Sept 21 (Reuters) - Euro zone bond yields held their ground on Tuesday as markets appeared to calm from a sell-off a day earlier driven by fears around Chinese property developer Evergrande's debt woes and their implications for global growth.

Stock markets and other riskier assets sunk on Monday, driven by fears that Evergrande might default and a commodities sell-off. That boosted safe-haven government bonds, pushing yields - which move inversely with prices - down sharply.

With stock markets stabilizing on Tuesday, and European indexes set to open a touch higher, euro area bond yields were largely stable.

After falling nearly 4 basis points on Monday, Germany's 10-year yield, the benchmark for the euro area, was up less than a basis point to -0.31% by 0655 GMT.

"Today could have felt a bit like the calm before the FOMC storm, but central banks have dropped a spot in the list of prime market worries," ING analysts told clients.

The U.S. Federal Reserve's policy decision is coming up on Wednesday, where the bank is expected to open the door to reducing its bond purchases, while tying any actual change to U.S. job growth in September and beyond.

"In all likelihood, the economic and financial ramifications of the Evergrande saga in China will be the main cause for rates direction in developed markets," ING added.

Still, there will be some central bank messaging for euro area investors to digest on Tuesday, with European Central Bank Vice-President Louis de Guindos due to speak at 0705 GMT.

Investors continue to focus on how the ECB is tracking developments in inflation. It argues that a spike in inflation this year is transitory, but a report that it expects to hit its inflation target by 2025 drove a bond market sell-off on Friday.

In debt auctions, Germany is targeting 3 billion euros ($3.5 billion) from the re-opening of a seven-year bond, while Finland will raise up to 1 billion euros from the re-opening of a 21-year bond.

($1 = 0.8524 euros)

(Reporting by Yoruk Bahceli; Editing by Pravin Char)