* Germany sells five-year bonds, demand lacklustre
* Japanese investors sell French bonds, buy German debt
* German 10/2-yr bond yield gap widest since July 2014
* Euro zone periphery govt bond yields tmsnrt.rs/2ii2Bqr (Writes through)
By Dhara Ranasinghe
LONDON, March 8 (Reuters) - German government bond yields rose on Wednesday, pushed higher after a sale of five-year paper revealed lacklustre demand among investors.
Germany, the euro zone's benchmark bond issuer, sold about 3.16 billion euros of bonds maturing in April 2022. The auction attracted 3.4 billion euros worth of bids, less than the 4 billion euros offered.
"It was a poor auction this time around and you see that in the market reaction," said Commerzbank rates strategist David Schnautz. "We know the ECB is keen on buying much shorter-dated debt so that may have tipped the balance against five-year paper."
Germany's five-year bond yield was up 3 basis points at at minus 0.53 percent.
In contrast, 2-year yields dipped to a one-week low of minus 0.89 percent, pushing the gap with 10-year bond yields out to around 123 bps -- the widest since July 2014.
A scarcity of eligible bonds for the European Central Bank's monetary stimulus scheme means the ECB is buying more bonds with a shorter-dated maturity, putting downward pressure on bond yields at the very short end of the yield curve.
According to Mizuho calculations based on ECB data released on Monday, the average maturity of German bonds bought for the ECB's bond-buying programme fell to three years in February from eight years in January and 10 years in December.
Despite the weak auction results, analysts said they expected demand for German government bonds to remain strong.
Worries about the euro zone's future as elections in the Netherlands and France loom, demand for top-rated bonds for use as collateral in funding markets and ECB bond buying have all underpinned demand for German bonds in recent weeks.
Data released by Japan's Ministry of Finance on Wednesday showed Japanese investors were net buyers of about 5.4 billion euros of German sovereign bonds in January, the largest amount since October 2014.
At the same time, Japanese investors sold French bonds for the third month in a row, the longest such spell since mid-2011.
While worries about French election risks have ebbed in the past week, the popularity of anti-euro far right presidential candidate Marine Le Pen has alarmed investors, who have increasingly switched out of French debt for safer German paper.
"There are a number of supportive factors such as euro zone break-up risk, which is increasing demand for shorter-dated German bonds," said Antoine Bouvet, rates strategist at Mizuho.
Christian Lenk, a rates strategist at DZ Bank, added that the investor data from Japan may help explain weakness in French bonds on Wednesday.
France's 10-year bond yield rose to a two-week high at around 1.04 percent, pushing the gap over German peers to around 68 bps -- its widest in a week.
Portugal, meanwhile, sold 1.11 billion euros of three and nine-year bonds, while the focus was expected to turn to Britain which releases its budget later on Wednesday.
Reporting by Dhara Ranasinghe; Editing by Angus MacSwan and Ken Ferris