ALSO READEuropean stocks wouldn't escape fallout from a Wall Street retreat Global Markets - Investors turn wary on Brexit, Trump uncertainty Oil fuels stocks rally, bond market pressure eases Asia Pacific Market: Stocks end mixed, Yellen speech eyed Europe, emerging markets boost stocks; U.S. assets fall on data
In a prepared testimony to be delivered to Congress, Yellen said the U.S. economy is healthy enough to absorb further gradual rate increases and the slow wind down of the Fed's bond portfolio.
The pan-European STOXX 600 equity index extended gains to hit a session high, up 1 percent with all sectors in positive territory.
Government bond yields across the bloc extended their declines, with Germany's benchmark Bund yield hitting its lowest level in almost a week at 0.514 percent.
Sterling jumped to the day's high of $1.2910 as the dollar weakened broadly, up from $1.2870 before the speech was published.
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