JOHANNESBURG, June 5 (Reuters) - South Africa's rand weakened on Friday as domestic markets digested a fall in foreign reserves last month, while U.S.-Iran peace talks kept sentiment cautious and inflation concerns in focus.

o At 1343 GMT the rand traded at 16.40 against the dollar, about 0.5% down from its previous close.

o South Africa's international liquidity fell to $73.47 billion at the end of May from $73.76 billion in April, central bank data showed on Friday.

o The U.S. dollar was up against a basket of currencies, while oil prices stabilised after Oman said operations at its Mina al Fahal port were proceeding normally, following a Reuters report of disruption after an explosion.

o As a net fuel importer, South Africa is heavily exposed to the spike in global energy prices.

o Next week, domestically focused investors will look to the statistics agency's release of gross domestic product figures on Tuesday for clues on the health of Africa's largest economy.

o Other releases include current account, mining and manufacturing data on Thursday.

o On the Johannesburg Stock Exchange, the Top-40 index was down 0.6%.

o South Africa's benchmark 2035 government bond weakened, with the yield up 13 basis points to 8.68%.

(Reporting by Sfundo Parakozov and Nilutpal Timsina; Editing by Mark Potter and Andrew Heavens)