MUMBAI: Indian government bond yields are expected to hold steady in early trading on Friday, as traders await fresh debt supply via the weekly auction and minutes of the central bank's latest policy meeting due later in the day.

India's benchmark 10-year yield is likely to move in a 6.95%-6.99% range, following its previous close of 6.9781%, a trader with a state-run bank said.

New Delhi will sell bonds worth 230 billion rupees ($2.75 billion) later in the day, which includes five-year bonds.

"Traders will gauge investor appetite in the debt auction, which may provide some cue, while comments from the Reserve Bank of India officials will be watched for further guidance on interest rate trajectory," the trader said.

The RBI will release the minutes of its June policy meeting after market hours. The central bank had maintained status quo on rates and stance as it aims to meet the 4% inflation target, even as two external members had voted for a change in stance as well as a rate cut.

Earlier this week, the RBI reiterated its resolve to meet its inflation target. RBI Governor Shaktikanta Das said India should avoid "adventurism" and continue to focus on bringing down inflation towards its 4% target.

High food prices were impeding the recent easing in inflation, causing its efforts to rein in prices remain a "work in progress", the RBI said in a bulletin.

The 10-year U.S. yield stayed near the 4.25% mark amid anticipation that the Federal Reserve will cut rates by 50 basis points in 2024, even as the central bank slashed its forecast to only one cut of 25 bps this year, down from three projected in March.

Traders will also keep an eye on foreign flows as Indian bonds are just a week away from getting included in JPMorgan's emerging market debt index. KEY INDICATORS: ** Brent crude futures 0.1% lower at $85.60 per barrel, after rising 0.8% in previous session ** Ten-year U.S. Treasury yield at 4.2672%, two-year yield at 4.7478% ** India to sell sovereign bonds worth 230 billion rupees ** RBI to set underwriting fees for 230 billion rupees of sovereign bond auction ** RBI to conduct 6-day variable rate repo for 1 trillion rupees ($1 = 83.5930 Indian rupees) (Reporting by Dharamraj Dhutia Editing by Eileen Soreng)