(Bloomberg) -- The European Central Bank “can and must react against” any unwarranted rise in bond yields that threaten to undermine the euro-area economy, policy maker Francois Villeroy de Galhau said.The comments by the Bank of France governor, among the strongest yet by ECB officials, encouraged investors to bet that the central bank is already stepping up its own emergency bond-buying program. While fresh data on Monday showed net purchases slowing last week, it said the figures were distorted by redemptions.The yield on 10-year Italian debt fell 10 basis points to 0.66%, its biggest decline since June.Yields are being pushed up by a global selloff of longer-term government bonds. That’s a concern for the euro zone because returns on sovereign debt are used by lenders as a reference point for their loans to companies and households.The bloc is lagging well behind the U.S. and U.K. in vaccinations, forcing it to extend virus restrictions that hurt the economy. ECB officials have been pledging for a week that they’ll act if needed, yet they’ve barely managed to stem the selling.Villeroy said part of the recent tightening of financial conditions is due to “excessive spillovers and tensions.” The ECB should start by using its pandemic emergency bond-buying program to drive down yields, he said, and “we continue to stand ready to adjust all of our instruments, as appropriate, including possibly a lowering of the deposit rate if needed.””Villeroy’s statement voices the sentiment of most analysts after last week’s events: with the euro-zone growth outlook being weighed down by slow vaccine distribution, the ECB must avoid undue policy tightening,” said Simon Harvey, senior analyst at Monex Europe. “However, talk is cheap and the market will need proof of action by the ECB after today’s bemusing data.”The ECB settled 12 billion euros ($14.5 billion) of net purchases under its emergency program, compared to 17.2 billion euros the week before. A fuller picture will be available on Tuesday when figures on the redemptions are released.The French government redeemed a 3-year bond last week, which had 31 billion euros outstanding, according to Bloomberg data.“It is unfortunate timing, if they wanted to send a signal to the market,” said Piet Christiansen, chief strategist at Danske Bank A/S. “But they would have been aware of the large redemption.”The purchase data also don’t reflect orders made Thursday and Friday, as transactions take a couple of days to settle and show up in the ECB’s accounts.Economists mostly predict the euro-area economy will contract this quarter, before starting a recovery around the spring. The bloc’s fiscal support is also smaller than in the U.S., and a breakthrough recovery fund won’t kick in until the middle of the year.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.