* Yields rise on caution before Friday's payrolls report * Treasuries track bunds lower as ECB holds rates steady * Fed buys $1.25 bln bonds due 2040-2043 * Treasury to sell $84 bln 3-, 6-mth bills, yields rise By Karen Brettell NEW YORK, Feb 6 (Reuters) - U.S. Treasuries yields rose on Thursday to their highest in a week as investors positioned for Friday's highly anticipated jobs report for January, which is expected to show more robust growth than December's surprisingly weak U.S. jobs gains. Treasuries yields tumbled in the past month as weakening data raises concerns over the strength of the economic recovery while fears over emerging market economies have also led investors to flee their assets and buy safe haven U.S. government bonds. But traders are cautious that yields could rise again if jobs and other data rebounds from their recent weakness, keeping the Federal Reserve on track to reduce the size of its monthly bond purchases, and if volatility in emerging markets ebbs. "You're going to continue to see a battle between the EM flight-to-quality concerns and the fact that the Fed, which has been the biggest buyer of Treasuries and mortgages in the world, are slowly but surely reducing what they are buying," said Jason Rogan, managing director in Treasuries trading at Guggenheim Partners in New York. Benchmark 10-year Treasuries yields were last down 10/32 in price to yield 2.71 percent. The yields have dropped from more than 3 percent at the beginning of the year and traded as low as 2.57 percent on Monday, the lowest since Nov. 1. Employers are expected to have added 185,000 jobs in the month, according to the median estimate of 101 economists polled by Reuters. Some traders are anticipating a slightly lower number of jobs additions, of around 160,000 - 170,000. The number of Americans filing new claims for unemployment benefits fell more than expected last week, in a boost to the labor market outlook and the broader economy, data showed on Thursday. Other data showed a weakening in exports in December, which if it extends to January could see trade being a drag on growth in the first quarter after it helped to buoy the economy in the last three months of 2013. The Fed last week cut its monthly bond purchases by $10 billion, to $65 billion and is expected to continue reducing the size in $10 billion increments if the economy maintains moderate growth. The U.S. central bank bought $1.25 billion in bonds due 2040 to 2043 on Thursday as part of its ongoing purchases. It will purchase between $500 million and $750 million in debt due from 2024 to 2031 on Friday. Treasuries had weakened earlier in choppy trading after European Central Bank President Mario Draghi gave no hint of imminent monetary policy easing, tracking German government bonds. The ECB left interest rates unchanged on Thursday, as was expected by economists, but put markets on alert for a possible move in March, acknowledging that emerging-market turbulence could hit the euro zone. BILL ISSUANCE SURGES Treasury bill yields also jumped on Thursday after the Treasury said it will sell $84 billion in new three-month and six-month bills next week, much more than many had expected. The government has been reducing its short-term debt issuance heading into the debt ceiling reinstatement on Saturday, as it has faced restrictions on selling debt that is not needed for immediate expenses. It has been expected to increase supply after the deadline as it faces higher seasonal needs for cash, including to pay tax refunds. But demand for some short-term debt may drop if lawmakers delay raising the debt ceiling. Treasury Secretary Jack Lew has said the administration could use accounting measures to stay under the new cap until the end of February. "With the debt limit being reinstated on February 8, the Treasury most likely wanted to avoid having to raise too much cash later in the month," said Kenneth Silliman, head of short-term rates trading at TD Securities in New York. "The Treasury most likely front-loaded a significant portion of their issuance needs to stay in front of a volatile situation which could ensue from a potential default should lawmakers once again drag negotiations out to the eleventh hour. Money Market investors are not willing to follow Washington to the brink," Silliman said. Next week's sales include $42 billion in 13-week bills and $42 billion in 26-week bills, both on Monday. The U.S. will also sell $50 billion in cash management bills on Monday. Yields on three-month bills rose as high as 8 basis points, the highest since December 31. Six-month bill yields also increased to 8 basis points, the highest since January 9.