Aug 7 (Reuters) - German Bund futures extended losses on Tuesday with the prospect the European Central Bank may resume bond buying supporting longer-dated Spanish and Italian debt and sapping appetite for lower risk assets. German Bund futures fell to a session low of 142.82, 38 ticks lower on the day and 10-year cash yields were 2 basis points higher at 1.42 percent. "The periphery has been trading quite well in the past few days so some people are selling Bunds. The sentiment has improved a bit," one trader said. Spanish 10-year bond yields were 4.5 basis points lower at 6.75 percent, with the Italian equivalent 6 bps lower at 5.94 percent.

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