LONDON, Nov 2 (Reuters) - Italian government bond yields fell sharply on Wednesday on speculation that Rome could delay its constitutional referendum scheduled for December 4.

Analysts cited a radio interview in which Interior Minister Angelino Alfano told RTL 102.5 on Wednesday he would be in favour of postponing the constitutional referendum if the opposition asked for a delay.

Alfano said the government has no plans to postpone the referendum at present but its position may change if the opposition asked for the vote to be delayed. Prime Minister Matteo Renzi has so far dismissed the idea of postponement of the vote.

Italy 10-year bond yields fell 8 basis points to 1.60 percent while Spanish yields fell 10 basis points to 1.20 percent, the biggest fallers in a broad euro zone bond rally on Wednesday.

“Italy does appear to be leading the positive move in peripheral bond markets, which coincides with the comments from Alfano suggesting that the referendum should be delayed,” said Richard McGuire, head of rates strategy at Rabobank. (Reporting by John Geddie and Dhara Ranasinghe; Editing by Mike Dolan)