Rising expectations that the central bank will cut its key rates when it meets on Dec. 18 to support the slowing economy had driven the rally in bonds.

By 1000 GMT, the yield on the two-year benchmark bond was at 5.84 percent, up from a previous close of 5.82 percent. It hit a record low of 5.67 percent on Wednesday.

"Bond yields were falling sharply for 15 days, and now investors are selling to take profits. Besides, local banks sell short-term bonds to put the cash in the central bank's accounts for their reserve requirements," said Ugur Kucuk, a fixed-income strategist at Is Investment.

"The trend in the upcoming period will depend on the central bank's rate decision at the policy meeting," he said.

At its November meeting, the central bank cut its overnight lending rate for a third consecutive meeting to counter the slowdown in the economy.

Since August 2011, the bank's policy rate - the one-week repo rate - has stayed at 5.75 percent and its overnight borrowing rate - the bottom end of the interest-rate corridor - at 5 percent.

Istanbul's main share index was up 0.02 percent at 76,057 points, underperforming a 0.26 percent rise in the global emerging markets index.

An easier monetary policy outlook has also boosted Turkish shares, which hit a record high 76,131.88 points on Wednesday. Since the start of the year, the index has rallied about 48 percent.

"After five consecutive days of higher closes we should see some capitulation of gains and consolidation today," analysts at EkspresInvest wrote in a note.

The lira was flat against the dollar at 1.7883 and against its euro-dollar basket at 2.0632.