MUMBAI, Jan 17 (Reuters) - India"s benchmark 10-year bond yield hit a two-year high on Monday, tracking an uptick in U.S. yields and a continued rise in global crude oil prices which has raised expectations of rate increases by the Reserve Bank of India. U.S. Treasury yields rose on Friday and stayed higher in Asia trade as a batch of soft consumer and manufacturing activity data was seen as not enough to derail the Federal Reserve"s path of tightening policy. "Looks like markets have prepared themselves for hikes now. Reverse repo hike in February and April onwards repo too," said Harish Agarwal, a fixed income trader at First Rand Bank. India"s benchmark 10-year bond yield , rose 6 basis points from Friday"s close to 6.64%, its highest since Jan. 22, 2020. The RBI has held its key repo rate at a record low since mid-2020 but has started scaling back secondary market bond purchases and withdrawing liquidity through short-term reverse repurchase auctions as it begins policy normalisation. Oil prices edged up on Monday as investors bet supply will remain tight amid restrained output by major producers with global demand unperturbed by the Omicron coronavirus variant. The RBI has projected inflation to stay high in the near term but a sustained rise in global crude prices threatens to keep retail prices higher for much longer and drive inflation above its mandated 2%-6% range. The central bank"s discomfort with rising yields is evident but traders doubt the RBI will target any particular level or aggressively intervene to stop yields from heading up. "In the last nine weeks, the RBI has cumulatively sold bonds worth 210 billion rupees. This along with devolvement (forcing underwriters at auctions to buy the debt) in recent auctions suggest that the RBI is trying to cap yields," HDFC Bank wrote in its weekly note. Traders will now wait for details of this week"s 240 billion rupee ($3.23 billion) debt sale and results of a 100-billion-rupee debt switch auction later today for near-term clues. "I think the next resistance is at 6.65%, don"t think it should go higher from here," Agarwal said. ($1 = 74.2690 Indian rupees)