The treasury will tap a four-year fixed-coupon bond and a 10-year CPI-linked bond later on Monday.

It placed a combined 2,194 million lira ($1.2 billion) of the two bonds through non-competitive tenders before the auctions, of which 994 million lira went to primary dealers and 1,200 million lira to public institutions.

By 1048 GMT, the lira firmed to 1.7819 to the dollar from 1.7837 late on Friday. Against the euro-dollar basket it strengthened to 2.0527 from 2.0550.

The yield on the two-year benchmark bond fell to 6.28 percent from Friday's close of 6.37 percent.

"The fall in bond yields has started before the auctions, in line with the fall in global yields and continued as the bids in the non-competitive tenders were high," said Ugur Kucuk, fixed income strategist at Is Investment.

"The high level of Turkish bond yields is attractive for investors," he said. The two-year yield fell more than 500 basis points in 2012. It hit its all time lowest level of 5.66 percent on Nov. 5 on an easier monetary policy outlook, although it rose around 20 basis points since mid-December as investors sold for profit taking in thin trade before the year-end.

In January, the treasury plans to borrow 11.6 billion lira from domestic markets through a total of five bond auctions against domestic debt redemptions of 13 billion.

Istanbul's main share index was up 0.64 percent at 80,072.56 points, outperforming a fall of 0.17 percent in the global emerging markets index.

"Locally, traders will eye the direction of benchmark bond yields in the wake of Wednesday's sizeable redemption," wrote analysts at Ekspres Invest.

Center>Copyright Reuters, 2013