Italy's five- and 10-year debt costs hit three-month highs on Thursday at an auction that drew solid demand, as investors with one eye on central bank stimulus programmes chased higher returns.

Demand was stronger than in two other Italian debt sales this week, and the 4.55 percent the treasury paid to sell the 10-year paper was slightly lower than market yields.

It was also below the peak of 4.90 percent hit since the U.S. Federal Reserve prompted a global selloff of riskier assets last week with a clear signal that it planned to scale back its bond-buying programme.

Appetite for risk got a boost on Wednesday when European Central Bank policymakers said monetary tightening remained a distant prospect for the euro zone.

"Strenuous efforts by central bankers over the last few days to reassure markets that they are in no hurry to tighten monetary policy has paid off sentiment-wise," said Nicholas Spiro, managing director at Spiro Sovereign Strategy.

In addition, a sharp downward revision to U.S. first quarter growth data doused expectations of a quick reversal of the Fed's ultra-loose monetary policy.

Investors bought 2.5 billion euros ($3.25 billion) of the longer-dated bonds, with yields rising from 4.14 percent at last month's auction. Demand rose to 1.46 times the offer from 1.38.

Rome also sold 2.5 billion euros of five-year bonds, with a yield of 3.47 percent, up from 3 percent with demand slipping.

The 10-year bond attracted buyers who believe the yield spread between Italian BTP government bonds and German Bunds may have risen too much in recent weeks, analysts said.

"Spreads versus Bunds and other EMU debt looked attractive and demand was well supported by those dealers who bet on some re-alignment in spreads," said Annalisa Piazza, market economist at Newedge.

Rome has managed to sell the maximum amount planned of 17.5 billion euros of debt this week. With Thursday's auction, it has shifted 63 percent of its medium and long-term target for 2013 at sharply lower rates than one year ago, before the European Central Bank made a pledge to shield the bonds of vulnerable euro zone countries.

The recent dip in yields reflected in Thursday's auction result showed little correlation with economic conditions.

Industry body Confindustria said the economy would contract more than expected this year and debt and joblessness rates would continue to rise.