EURO GOVT-Bunds rise on caution over Greece, Spain
* Bunds rise, periphery falls before the weekend
* But Greek hopes see Bunds set for weekly decline
* Spanish yields edge up before Catalonia elections
LONDON, Nov 23 (Reuters) - German government bonds edged up and yields on peripheral bonds rose on Friday as uncertainty over Greek aid talks and a regional election in Spain led investors to cut their exposure to risk.
But expectations Greece would soon secure the next tranche of its aid package meant low-risk German Bunds were still on track for their first weekly loss in five weeks.
The release of 44 billion euros of funds has been delayed by disagreements between the European Union and the International Monetary Fund over how to make Greece's debt sustainable.
A senior government official said on Friday Greece's international lenders had agreed on new measures to cut the debt further but it still had to bridge a 10 billion euro funding gap to gain the IMF's approval.
Market reaction was muted. Analysts said that with the likelihood of a deal already more or less priced in, more concrete news would be needed.
"It's not the first time we have this type of news. The market knows there is a disagreement," said ING rate strategist Alessandro Giansanti.
"Until there is an official statement, detailing what they want to do, especially in terms of a debt restructuring, we're not going to see so much of a reaction."
Greek government bond yields were 10 basis points higher -- a relatively small move for the volatile paper -- at 16.54 percent, but still close to their lowest levels since the country's debt was restructured in March.
Bund futures were 27 ticks higher at 142.43, having fallen around a point this week, and 10-year yields were 2 bps lower at 1.42 percent.
Traders said some market players were booking profits after this week's rally in the periphery, not wanting to hold riskier positions as the weekend approached.
Expectations a deal on Greece will be reached on Monday, when euro zone finance ministers meet.
"We're really waiting for Monday," a trader said.
"The main flows this week have been the reasonable buying of the periphery from Spain to Greece. It doesn't take much to move prices significantly and there's been enough of a one-way flow in these markets to make a difference."
As profits were taken on that peripheral rally, Bunds rose and held gains despite business sentiment survey data from Germany's Ifo institute beating analysts' expectations .
Over the weekend, markets will be keeping an eye on elections in the Spanish region of Catalonia.
However, although the election has been seen as a hurdle to be cleared before Spain would seek a bailout, markets do not expect such a request this year as Spain has already completed its 2012 funding programme.
Spanish 10-year yields have fallen around 20 bps this week as peripheral markets rallied, further taking the pressure off Spain to seek help.
They were last 3 bps higher on the day at 5.70 percent.