LONDON: Euro zone government bond yields dropped across the board on Thursday, tracking U.S. Treasuries, after minutes from a U.S. Federal Reserve meeting showed that the conditions necessary to order a slow down of its asset purchases had yet to be met.

But minutes from the Federal Reserve's July meeting showed that policymakers in the United States felt the employment benchmark for decreasing support for the economy could be reached this year.

The U.S. central bank is largely expected to begin tapering its asset purchases in the coming months, pushing the dollar to its highest level in months. Investors are trying to price in the exact timing and pace of the removal of monetary stimulus.

"The FOMC minutes were a mixed bag, but apparently somewhat less hawkish than markets had feared," analysts at RBC Capital Markets said in a note.

While inflation in the United States is above target, the Fed's stance that the maximum-employment goal had not yet been met suggests the timeframe for a tapering announcement is very unlikely to come at the September meeting, the analysts added.

Investors are watching for any signs the Fed will start to taper bond purchases and end the extraordinary stimulus put in place to combat the economic impact of the COVID-19 crisis.

U.S. Treasury yields fell 4 basis points in European trade to 1.233%, pulling other major government bond yields across the world lower.

Euro zone bond yields dropped across the board, with German 10-year bond yields, the benchmark for the bloc, falling a basis point to -0.49%, within touching distance of a six-month low of -0.524% hit earlier this month.

Longer-dated Bund yields dropped even more, with 30-year borrowing costs dipping 2 bps to a two-week low of -0.054%.

Other high-grade debt such as Dutch and Austrian government bonds also saw yields dip towards recent lows.,

Also on Thursday, France sold seven billion euros of short-dated conventional bonds and nearly 1 billion euros of inflation-linked bonds in a strongly oversubscribed auction process.