* ECB minutes due at 1230 GMT
* Flash PMI data also on the calendar
* Bond yields little changed
* Euro zone periphery govt bond yields tmsnrt.rs/2ii2Bqr
By Dhara Ranasinghe
LONDON, Nov 23 (Reuters) - Borrowing costs in the euro area crept up on Thursday ahead of the release of minutes from the European Central Bank’s October meeting, at which monthly asset purchases were extended well into 2018 albeit at a reduced pace.
In a week that has seen discussion among central bank officials focus on the changes in communication next year, the minutes could offer some insight into what the ECB may signal next.
Benoit Coeure, the ECB director in charge of its market operations, told a German newspaper this week he expects the ECB to drop by next September a pledge to continue buying bonds until inflation heads towards its near 2-percent target.
That was followed on Wednesday by a source-based story from Reuters that said rate-setters hope to put off debate on new moves until well into next year.
“What has materialised this week is how the debate is going to change in the future,” said Peter Chatwell, head of euro rates strategy at Mizuho.
“The most important information to come from the accounts will be the degree of support there was for keeping QE open- ended by saying that it can be done beyond September.”
After buying 2.2 trillion euros ($2.59 trillion) worth of bonds since March 2015, the ECB decided in October to halve its monthly purchases to 30 billion euros from January.
That reflected the euro zone’s best economic performance in a decade. But the ECB has also extended the scheme by nine months, since inflation is still barely rising.
The extension went done well with bond markets, where borrowing costs have been underpinned by ECB bond-buying.
Since the Oct. 26 ECB meeting, bond yields across the euro area have fallen 10-40 basis points, with the biggest falls coming in Portugal.
On Thursday most yields crept higher, although trading across markets was subdued due to the U.S. Thanksgiving holiday.
Germany’s benchmark Bund yield was steady at around 0.36 percent.
Many Federal Reserve policymakers expect that interest rates will have to be raised in the “near term”, according to the minutes of the U.S. central bank’s last policy meeting released on Wednesday.
Data on Thursday, meanwhile, provided further evidence of strength in the euro zone economy. French business activity grew at the fastest pace in 6-1/2 years this month, as recent labour reforms pushed firms to add staff quicker than at any time since 2001, a survey showed.
For Reuters Live Markets blog on European and UK stock markets see reuters://realtime/verb=Open/url=http://emea1.apps.cp.extranet.thomsonreuters.biz/cms/?pageId=livemarkets
Reporting by Dhara Ranasinghe; Editing by Gareth Jones