Spread closes nine points down
Still lowest since July 201130 December, 18:38
The yield was 4.08%, down from 4.20% Friday. A narrower spread indicates greater investor confidence in the Italian economy and Rome's ability to pay down its huge debt.
Analysts said investors were responding to a good bond sale and the prospect of political stability as Italy's left-right government embarks on reforms in the New Year, although pointers were seen as weak in thin holiday trading.
European markets posted minimal changes after a recent string of gains on optimism that the US economy is strong enough to withstand the gradual withdrawal of monetary stimulus.
The Milan bourse closed 0.06% up despite some turbulence among banking stocks, notably troubled Tuscan lender Monte dei Paschi di Siena (MPS) which seesawed after putting off a much-needed capital hike from January to May.
London was 0.29% down, Frankfurt 0.40% down, Paris 0.05% down, Madrid 0.02% up and Athens 0.62% down.