Euro zone government bond yields edged lower on Thursday after mixed inflation data from the bloc, while fears about the economic impact of a sudden disruption of Russian gas supplies to Europe dampened risk sentiment.

Spanish consumer prices marked the first slowdown since January and undershot a forecast of 9% by analysts.

German inflation looks likely to stabilize at 7.6% in April, based on regional data from five states and in line with analyst forecasts for federal data, due later in the day.

Looming over markets is uncertainty about the economic fallout of the war in Ukraine, highlighted by Russia halting gas supply to Poland and Bulgaria on Wednesday, and lingering pandemic lockdowns in China.

Germany's 10-year government bond yield, the bloc's benchmark, fell 0.5 basis points (bps) at 0.805%.

"The impact of a slowdown in demand is starting to kick in in some countries affecting consumer prices, but I think we don't have a clear trend in eurozone inflation yet," said Andreas Billmeier, European Economist at the Western Asset part of Franklin Templeton.

Spanish unemployment rose in January-March for the first time since the third quarter of 2020, raising concerns that an economic rebound may be faltering.

"Over the last couple of days, the market has been turning more of its attention to the growth outlook," he added.

However, European Central Bank president Christine Lagarde on Wednesday opened the door to a rate hike in July.

She was quoted as saying quantitative easing (QE) will end "in all likelihood early in the third quarter, probably in July" and that it would be the time to "look at interest rates and an increase in those rates".

Developments on Russian gas "makes it difficult for markets to get overly concerned about central banks' need to deal with inflation impulse," Mizuho strategists said.

ECB Vice President Luis de Guindos said on Thursday the central bank needs to keep a close eye on the recent rise in inflation expectations above its 2% target.

A key gauge of euro zone long-term inflation expectations was at 2.4% around its highest level in a decade.

Italy's 10-year yield was down 2 bps on the day at 2.99%, with the yield gap over benchmark German bonds at 174 bps.

Analysts expect spreads between peripheral and core euro zone bond yields to widen -- with Italian/German spread rising as high as around 190 bps by year-end -- as hopes for additional fiscal and monetary support for indebted Southern European countries fade.

"We have not discussed any concrete instruments... but I can assure you that we are ready to act," ECB's De Guindos said about fragmentation risks.

(Reporting by Stefano Rebaudo, editing by Emelia Sithole-Matarise and Angus MacSwan)