Turkey's lira inched off record lows on Friday but remained under pressure from a corruption scandal shaking the government and unease that a strong U.S. jobs report could prompt a further reduction in the Fed's bond-buying stimulus.

A deepening feud between Prime Minister Tayyip Erdogan's government and the judiciary and police has weighed on Turkish assets since the corruption investigation came to light last month. The inquiry has led three ministers to resign and damaged the ruling party ahead of elections this year.

Erdogan has cast the affair as a bid by U.S.-based Turkish cleric Fethullah Gulen to smear his AK Party before a local election in March and a presidential race, in which he is expected to stand, five months later. In the first major poll since the scandal broke, the popularity of the ruling AK Party slipped, though it remains well ahead of rivals.

"Against these myriad unknowns it is only reasonable to incorporate a much higher political risk premium than we have been accustomed to since 2002," said Inan Demir, chief economist at Finansbank.

Morgan Stanley said in a note to clients on Thursday that it saw significant downside risks to economic growth because of the political uncertainty and said those risks were still not reflected in Turkish asset prices.

The lira firmed to 2.1780 against the dollar by 07:51 GMT from 2.1850 late on Thursday, when it touched an all-time low of 2.1980 in early trade.

Markets were also cautious ahead of a U.S. jobs report due later, fearing that a strong reading would lead to sharper cuts in the U.S. stimulus that has flooded emerging markets including Turkey with cheap money.

Turkey is particularly vulnerable to cuts in the $85 billion monthly asset buying, which is set to be reduced by $10 billion this month, because of its large current account deficit.

Despite the pressure on the lira, Turkey's central bank has so far refused to raise interest rates for fear of crimping growth, attempting instead to support the lira through forex auctions and tightening monetary conditions by cancelling repo auctions, strategies analysts say have a limited shelf life.

The bank has said it plans to sell at least $6 billion at forex auctions by the end of this month, and has already sold more than half that amount, depleting its forex reserves.

The real average cost of funding for banks, running at around 7.12 percent, is meanwhile very close to the maximum it can reach without a change in headline rates. The central bank kept its main one-week repo rate at 4.50 percent, its borrowing rate at 3.50 percent and its overnight lending rate at 7.75 percent at its last meeting in December.

Stocks rose after two days of losses with the Istanbul index up 0.99 percent at 67,070 points, outperforming the main emerging market index, which rose 0.22 percent.

The yield on Turkey's 10-year benchmark bond rose to 10.09 percent from 10.04 percent late on Thursday.