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 Indian government bond yields bounced back from a nine-session streak of declines on Wednesday, tracking a spike in U.S. Treasury yields, while investors awaited the Reserve Bank of India's monetary policy decision on Friday.

India's 10-year benchmark bond yield ended five basis points higher at 7.2416%, after rising as much as 7.2526% in early trade. The yield on the most widely watched government bond had dropped 25 basis points in the last nine sessions, and closed at 7.1962% on Tuesday.

"The sharp spike in U.S. yields was the major trigger for today's move, and some traders also booked profits after the recent rally in bond prices," said Debendra Kumar Dash, senior vice president, treasury, at AU Small Finance Bank.

On Tuesday, two U.S. Federal Reserve officials signalled that the central bank remained committed to hiking interest rates to a level that would further curb economic activity, pushing U.S. 10-year yields 14 bps higher. It was trading at 2.7610%. [US/]

However, market participants don't expect the benchmark bond yield to breach 7.25% until the RBI monetary policy committee's decision as well as commentary from Governor Shaktikanta Das.

The policy decision is due on Friday, with views on the quantum of rate increase widely split between 25 basis points and 50 basis points, according to a Reuters poll of economists.

Dash expects the central bank to hike repo rate by 25 basis points as inflation is on a downward trajectory and aggressive rate hikes might not be needed.

India's headline retail inflation is expected to ease to its lowest level in five months in July due to declining in food prices as well as the effect of cut in fuel taxes, Barclays said.

The foreign brokerage expects the inflation reading at 6.65%, compared with 7.01% in June and a near eight-year high of 7.79% in April.