LONDON- Greek government bond yields hit fresh lows on Wednesday as the promise of more central bank largesse in the face of a spreading Delta variant lifted demand for even the lowest rated euro zone countries.

Other euro zone bond yields were steady near recent lows ahead of a meeting of the U.S. Federal Reserve, with the world's most important central bank also expected to keep the stimulus taps open.

Greece's strong performance comes at a time when most Southern European debt has benefited from the cautious stance taken by the European Central Bank in recent meetings and a shift in policy targets that have dovish implications. 

"Greek five-year yields hitting an all-time low is directly related to the ECB quantitative easing programme, specifically the PEPP programme," said Investec economist Philip Shaw.

He was referring to the central bank's pandemic emergency purchasing programme launched last year in response to the COVID-19 crisis that included Greek government bonds for the first time since the ECB started asset purchases in 2015.

"The advance of the European Union vaccination programme has also helped, and Greece is a beneficiary of that of course," he added.

Greece's benchmark 10-year government bond yield dropped a basis point to a 7-month low of 0.61% as the promise of more central bank stimulus boosted demand for euro zone government debt. 

Greece's 5-year bond yield also dropped further into negative territory to hit a new record low of -0.139%. It was down 1.3 bps at 1000 GMT. 

Later on Wednesday, the U.S. Federal Reserve is set to conclude its two-day meeting, with policymakers divided over how to respond to rising inflation in the face of increased coronavirus infections.

U.S. Treasuries yields ticked up slightly ahead of the meeting. The 10-year U.S. Treasury yield was up 2.5 basis points at 1.2577%, now a good distance from last month's low of 1.128%. 

Major euro zone bond yields hovered near recent lows, with Germany's 10-year government bond yield hitting -0.45% for the first time since early February, though it was flat again at -0.44% by 1000 GMT.

(Reporting by Abhinav Ramnarayan; Editing by Saikat Chatterjee and Joe Bavier) ((Abhinav.Ramnarayan@thomsonreuters.com; 0044 751 745 1044; Reuters Messaging: Twitter: @abhinavvr))