A rift within Portugal's governing coalition following the resignations of two ministers this week has pushed up yields on bonds of more indebted eurozone countries and favoured safe-haven paper. Portugal's own 10-year yields shot above 8 percent for a time on Wednesday but have since fallen back a bit.

Analysts said cheaper prices had helped underpin demand at Spain's auction of 4 billion euros ($5.2 billion) of bonds and the French sale, which raised 7.99 billion euros.

"The recent Portuguese-driven correction has enhanced the attractiveness of Spanish bonds and the auction was taken down very well," said Nick Stamenkovic, bond strategist at RIA Capital Markets in Edinburgh.

"The outlook in Portugal is very clouded. What's interesting is that Italy and Spain have been relatively resilient."

Spain sold 3 billion euros of a new five-year bond and 1 billion euros of an existing three-year bond, while France sold 10- and 15-year bonds. Both auctions raised all or nearly all their maximum targeted amounts.

Spain had to pay between 17 and 20 basis points more than it had to sell similarly-dated debt last month, and the 3.792 percent yield on the five-year bond was the highest since February. The yield on the 2016 bond was 2.875 percent, up from 2.706 percent when it was last sold a month ago.

Demand for the five-year bond outstripped supply by 1.7 times, while bids for the three-year paper were 3.5 times the offer amount.

France's public debt management agency Agence France Tresor said yields were up by 26-28 basis points from last month, although borrowing costs remain historically low at just 2.32 percent over 10 years and 2.84 percent for the 15-year bond.

The AFT sold 5.360 billion euros of the 10-year OAT and 2.630 billion euros of the longer-dated bond. Demand was robust with a bid-to-cover ratio of 1.7 for the 10-year paper and 2.7 for the 15-year.

CREEPING CAUTION

Spain, which was among countries at the forefront of the eurozone's debt crisis last year, has now raised almost 67 percent of its 2013 bond issuance target. It took advantage early in the year of demand for higher-yielding debt from investors flush with cash pumped in by global central banks.

Signals from the U.S. Federal Reserve that it will soon start scaling back its massive money-printing program have roiled markets in the last month, however, with fresh political tensions in Portugal and Greece also hitting confidence.

Spain's benchmark 10-year bond yield rose to around 4.8 percent on Thursday from a May low of 4 percent but is still a long way from its peak of over 7.6 percent, hit last July before the ECB pledged to do whatever was needed to defend the single currency.

Portugal's prime minister, Pedro Passos Coelho, and junior coalition party CDS-PP were seeking on Thursday to heal a rift that risks derailing Lisbon's exit from its European Union/International Monetary Fund bailout.

Aid payments Greece needs to keep afloat could meanwhile be frozen after Athens said on Wednesday it would not meet targets on reforming its public sector by an end-of-the-week deadline set by its international lenders.

The European Central Bank left interest rates unchanged at its monthly meeting on Thursday, and ECB President Mario Draghi will seek at the subsequent news conference to reassure investors rattled by the resurgent political worries.