LONDON : Italian bonds rose on Wednesday, extending the previous day's gains after a bumper retail bond sale, highlighting a hunt for higher returns as monetary easing by global central banks depresses yields on low-risk debt.

Italian bonds outperformed Bunds - the euro zone's lowest-risk debt - after a sale of inflation-linked bonds targeted at wealthy domestic investors on Tuesday raised 17 billion euros, beating the Treasury's predictions of just under 10 billion euros.

Demand for euro zone debt is also benefiting from anticipation that Japanese buyers will seek higher returns in foreign bonds after the BoJ's huge money printing.

 plans which have kicked yields on domestic bonds to ultra-low levels.

"The global liquidity rush is helping to support peripheral bonds. We've seen this with the Italian bond sale and that has helped to maintain the positive sentiment," said Philip Tyson, a strategist at ICAP.