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Indian government bond yields are seen mostly steady in opening trades on Thursday as traders await headline retail inflation data as well as fresh supply of notes through weekly debt auction.

During the session, the yield on the 10-year benchmark bond is likely to trade in a 7.28%-7.34% band, a trader with a private bank said. It closed at 7.3101% on Wednesday, and had eased after rising for two previous sessions.

"With U.S. yields steady after their inflation data, we do not expect any major action today," the trader said, adding the focus would be on local inflation reading as well as debt supply ahead of the long weekend.

Indian's retail inflation data for July is due on Friday. A Reuters poll of economists expects July inflation to temper down to 6.78% from 7.01% in June and the near eight-year high of 7.79% in April.

The Reserve Bank of India hiked key policy rate by 50 basis points on Aug. 5 - its third consecutive rate hike - after inflation stayed above the upper level of its tolerance band for six straight months.

On Friday, India's central government is due to conduct sale of bonds including liquid five-year and 14-year notes for 320 billion rupees ($4.04 billion).

Meanwhile, U.S. Treasury yields recovered from its fall and the 10-year yield ended largely steady on Wednesday.

Inflation reading in the world's largest economy was at 8.5% on-year for July, down from 9.1% in June, while Reuters poll had predicted the reading at 8.7%. Inflation was unchanged month-on-months.

KEY INDICATORS:

** Brent crude futures down 0.1% $97.30 per barrel

** Ten-year U.S. note yield at 2.79%

($1 = 79.1260 Indian rupees)