Indian government bond yields ended marginally higher on Friday amid fresh debt supply and as U.S. yields were off their recent lows, while traders remained cautious ahead of a long weekend.

The benchmark 10-year yield ended at 7.0925%, following its previous close of 7.0758%. For the week, the yield eased 3 basis points, a fourth consecutive weekly decline.

Indian markets will remain shut on Monday on account of voting in the country's financial capital Mumbai.

Earlier in the day New Delhi sold bonds worth 310 billion rupees ($3.72 billion), which includes 200 billion rupees of the 7.10% 2034 paper that will soon replace the existing benchmark bond.

The 10-year U.S. yield rose to around 4.40%, after dropping to 4.31% on Thursday, as data showed jobless claims fell in the latest week.

U.S. yields had dropped after consumer price inflation cooled in April, boosting expectations that the Federal Reserve will cut interest rates twice this year.

"Bond yields may not immediately go down, as any rate reduction seems some time away, but underlying sentiment remains bullish so we could see upside to also remain capped," said Soumyajit Niyogi, a director at India Ratings & Research.

It will be a range play for the next few sessions, Niyogi added.

Meanwhile, most Indian bond traders are looking for a cut in the government's short-term borrowing as a better way to regulate banking system liquidity after two consecutive attempts to buy back debt failed, several traders said.

Despite the lacklustre outcome, the government announced a third buyback to be held on Tuesday, where it aims to repurchase securities worth up to 600 billion rupees.

Traders also continued to keep an eye on foreign inflows, after the recent selloff, while BlackRock Inc is looking to raise its share in Indian government bonds via recently launched exchange-traded funds (ETFs), a fixed income strategist at the firm said. ($1 = 83.3121 Indian rupees)

(Reporting by Dharamraj Dhutia Editing by Eileen Soreng)