* Irish, Portuguese 10-year bond yields hit two-week highs
* Investors worry their central banks to hit bond-buy limits
* Ireland will reduce pace of bond-buying by 50 pct - source
* Most euro zone bond yields fall on QE relief (Updates prices for close)
By Dhara Ranasinghe
LONDON, Dec 9 (Reuters) - Bond yields in Ireland and Portugal surged to two-week highs on Friday as investors singled out countries that may face a scarcity of eligible debt for the European Central Bank's asset purchase programme.
A day after the ECB announced it would extend quantitative easing to the end of 2017, the two countries were left behind in a broad rally as investors worried that they may not benefit fully from the extra nine months of stimulus.
National central banks buy their own government debt under the ECB's bloc-wide stimulus programme, but the purchases are limited to a third of their outstanding debt.
Ireland's central bank will reduce its pace of purchases under the stimulus scheme -- which has stood at around 1 billion euros per month recently -- by around 50 percent, a source familiar with the matter said on Friday.
The Bank of Portugal said that it will not alter the way it purchases debt under QE, and will make sure Portuguese debt is bought until the end of the plan.
"Markets are punishing Ireland and Portugal because some people think the issuer limit will be hit next year," ING strategist Martin van Vliet said. "They appear to be the victims of this exercise, at least today."
Ireland's 10-year government bond yield rose as much as 6 basis points to 1.00 percent, while most other euro zone bond yields were 1-5 bps lower on the day.
Portuguese bonds were the other notable underperformer.
Ten-year borrowing costs in the indebted southern European state rose as much as 9 basis points to a two-week peak of 3.90 percent. That comes on top of a 24 bps jump on Thursday - the biggest one-day rise since June 24, when markets reacted to Britain voting to leave the European Union.
Societe Generale said purchases of Portuguese and Irish government bonds, at the current pace, would end by March. Others said the ECB's move on Thursday to lower the threshold to include one-year bonds should eke out purchases of Portuguese and Irish debt for a little longer, though not until December 2017.
For other euro zone bonds, the ECB's unexpected decision to continue its stimulus programme at reduced levels through 2017 gave way to relief that the bond-buying would remain in place for some time.
The ECB on Thursday said it would trim monthly purchases to 60 billion euros from 80 billion euros from April.
Still, the ECB promised protracted stimulus to support the region's fragile economic recovery, and the extension of the scheme until the end of 2017 was three months longer than expected.
"It is clear that even if there is a tapering, and we would call it that, the overall message from the ECB yesterday was dovish," said Jan von Gerich, chief strategist at Nordea.
Germany's benchmark 10-year bond yield was down 5 basis points (bps) at 0.35 percent, some 10 bps below an 11-month high hit on Thursday after the ECB met.
Reuters new Live Markets blog on European and UK stock markets see reuters://realtime/verb=Open/url=http://emea1.apps.cp.extranet.thomsonreuters.biz/cms/?pageId=livemarkets (Additional reporting by John Geddie; Editing by Jeremy Gaunt and John Stonestreet)