JOHANNESBURG (Reuters) - South Africa's rand opened firmer and gained nearly two percent on the dollar in early trade on Thursday as emerging markets received a boost from headway made by European officials to resolve the region's debt crisis. Government bonds, still supported by no extra issuance announced by the finance ministry's budget, were further boosted by the rand's gains, pushing yields to two week lows on the benchmarks. Producer prices for September are seen increasing from a low base on a year-on-year basis but monthly inflation should slow as summer electricity tariffs drive down prices. The data is due at 0930 GMT. The rand was up 1.8 percent at 7.8250 to the dollar so far in the session. It closed at 7.9651 in New York on Wednesday. "The rand has picked up a bit of strength overnight on the back of this (firmer euro)," said Jim Bryson, currency trader at Rand Merchant Bank. "The rand will react as the euro reacts to breaking stories. For now its going to be volatile within its recent ranges but through about 7.76/78 that could change and you would see more rand strength," Bryson added. Yields on the benchmark 2015 and 2026 maturity bonds dropped to October 10 levels as investors bought up South African debt during the risk rally. Foreign buying of rand bonds amounted to about 2 billion rand on Tuesday as the market was cheered by an announcement that the government was not increasing supply to plug the budget gap. The yield on the 2015 note gave up five basis points to 6.625 percent and that on the 2026 paper was down 3.5 basis points to 8.315 percent. Treasury is switching 2013 inflation-linked paper into 2017, 2022 and 2033 bonds at an auction later today. Results are out at 0930 GMT.

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