* Euro zone periphery govt bond yields http://tmsnrt.rs/2ii2Bqr

AMSTERDAM, Sept 23 (Reuters) - Italy's 30-year bond yield fell to a record low on Wednesday as the country's debt remained supported after local elections reduced the likelihood of a snap election.

Matteo Salvini's far-right League failed to deal a fatal blow to Italy's coalition government in regional elections held on Sunday and Monday and voters approved a referendum cutting the number of seats in parliament, both making a snap election less likely. That sent Italian bond yields tumbling on Tuesday.

The rally continued on Wednesday, with Italy's 30-year yield falling to a record low at 1.76% in early trade, while 10-year yields fell to their lowest since early October last year at 0.83%. Bond yields were down 3 to 4 basis points across Italy's curve.

"With the odds for snap elections also remote after the recent votes, investors should thus remain comfortable to capture carry in BTPs," Commerzbank analysts told clients, referring to a trade where investors use cheap funds to invest in higher-yielding assets like Italian bonds.

Focus was on first readings of purchasing manager index data. Safe-haven German bond yields extended their fall after the readings showed French business activity across services and manufacturing unexpectedly shrank and German services activity also shrank in September.

Germany's 10-year yield was last down about 2 basis points to -0.52%, but remained above a recent low around -0.54%.

The broader euro zone reading is due at 0800 GMT.

The growth and inflation outlook in the euro zone has not deteriorated since the European Central Bank decided to keep its policy unchanged earlier this month, board member Yves Mersch told Bloomberg on Wednesday.

He also noted that extending the flexibility of the pandemic bond purchases to the ECB's conventional bond buying, as a Financial Times story suggested on Sunday, could risk legal scrutiny.

That came in contrast with recent dovish statements from other ECB policymakers, which have led investors to ramp up their bets for rate cuts by mid-2021. (Reporting by Yoruk Bahceli, editing by Larry King)