ISTANBUL, May 10 (Reuters) - Turkish bond yields rose slightly on Friday after a global exit from emerging market bonds, but with the rise limited by anticipation that the central bank will trim interest rates next week.
A global trend to buy safe-haven bonds was triggered by a senior Fed official's comments on Thursday, who said the U.S. Federal Reserve should slow its massive asset purchase programme.
But expectations that the central bank will cut rates at its monetary policy meeting on May 16, after cutting all three policy rates by 50 basis points last month, continued to exert downward pressure on Turkish bond yields.
The two-year benchmark bond yield stood at 5.01 percent at 1210 GMT, up from Thursday's 4.97 percent. It has dropped more than 120 basis points since the end of March.
The yen made a decisive break through 100 to the dollar to hit a 4-1/2 year low on Friday, triggering a rise in safe-haven bond yields and supporting gains in European and Japanese shares which hit new five-year highs.
'Statements from Fed officials had an impact on our long term bonds as well, but we don't expect a significant rise in yields at the moment,' said an Istanbul-based bonds trader.
'We are also waiting for Treasury auctions next week,' he added.
The Turkish Treasury will hold five bond auctions next week, including the issue of a new 2-year benchmark bond. The Treasury aims to borrow 14.5 billion lira through 6 auctions in May.
Turkey's main stock index traded down 0.89 percent on Friday after closing down 1.01 percent on Thursday in profit taking as the index achieved a new record high on Wednesday.
The Turkish lira weakened to 1.8003 against the dollar from 1.7940 late on Thursday.
(Writing by Ece Toksabay; editing by Ron Askew) Keywords: MARKETS TURKEY/
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