German factory slump sends Bund yield to near one-year low

* Biggest fall in factory orders in six months

* Bund yield within sight of 0.05 percent record low

* Oil price fall, beefed-up ECB bond-buying also factors (Updates prices)

By John Geddie

LONDON, April 5 (Reuters) - German 10-year Bund yields fell below 0.10 percent for the first time in almost a year on Tuesday, as the biggest fall in the country's factory orders in six months suggested a global slowdown was leaving its mark.

The unexpectedly weak data, accompanied by a downward revision to euro zone business growth, keeps the onus on central bank easing at a time when yields are also being pushed lower by the European Central Bank's ramped-up bond purchase programme.

Strategists said a fall in oil prices to a one-month low, on an unexpected U.S (Other OTC: UBGXF - news) . demand drop, was also weighing on inflation, pushing down yields already under pressure from data that showed weaker foreign demand for German goods.

"The data signals weaker export growth, softer demand both within the euro zone and (further) abroad and thus suggesting that the ECB's challenge as regards boosting inflation and inflation expectations is and will remain very much an uphill battle," Rabobank strategist Matt Cairns said.

Contracts for "Made (Paris: FR0010328302 - news) in Germany" goods were down 1.2 percent on the month, the Economy Ministry said, compared with a Reuters consensus forecast for a rise of 0.2 percent.

A final reading of euro zone business growth in March also came in lower than flash estimates on Tuesday, showing only a slight rise from February's 13-month low.

German 10-year yields - the bloc's benchmark - dropped 4 basis points to 0.081 percent, the lowest since late April 2015 and within sight of a record low of 0.05 percent hit that month.

Euro zone shares fell 1.8 percent, with Germany's DAX down 2.4 percent.

The ECB's chief economist said on Monday the bank is prepared to ease monetary policy further if necessary to prevent low inflation in the euro zone from becoming entrenched.

Much of the additional ECB bond buying is expected to be targeted at government debt in the short term, as plans to include corporate bonds in the 80 billion euros ($91 billion) a month scheme take effect later this quarter.

There is no consensus that Bund yields could break new lows and turn negative, but such bets are emerging. Some analysts are wary that another sharp sell-off, like the one seen just after lows were struck last year, could occur as Bunds get expensive and liquidity conditions remain poor.

Greek borrowing costs extended Monday's sharp rise on concerns around its finances, despite a promise from Prime Minister Alexis Tsipras that the country's first bailout review would be completed by April 22.

Two-year Greek yields hit a one-month high of 11.6 percent as investors fretted about a leaked transcript supposedly detailing a threat that the IMF might not participate in the country's third bailout programme. ($1 = 0.8790 euros) (Editing by Tom Heneghan and David Holmes)