Treasury yields up as new coronavirus cases decline

US Treasury yields rose on Wednesday amid renewed risk tolerance after a reported drop in the number of new coronavirus cases in China alleviated some concerns about economic growth.

The benchmark 10-year yield was up 4 basis points in afternoon trading at 1.6299%.

Investors sold safe-haven bonds and bid up other assets, including US stocks, also encouraged by the latest quarterly earning reports.

"There seems to be better risk appetite," said John Briggs, head of strategy, Americas, at NatWest Markets. Wednesday's

trading, he said, reflects "a removal of the flight-to-quality" seen in recent days.

Briggs said Treasury markets were likely not affected by comments from US Federal Reserve chairman Jerome Powell, who on Wednesday reiterated his confidence in the sustainability of the record-long US economic expansion.

"There's no reason why the current situation of low unemployment, rising wages, high job creation - there's no reason why it can't go on," Powell told the Senate Banking Committee in his second day of congressional testimony.

China on Wednesday reported its lowest number of new coronavirus cases since January, lending weight to a prediction by its top medical adviser that the outbreak will end by April.

However, it was still unclear to what extent economic growth would take a hit from the virus, which has killed more than 1,100 people, shuttered businesses in China and briefly disrupted a global stock market rally in the past weeks.

Also in Washington on Wednesday, US Treasury Secretary Steven Mnuchin said that the negative economic impact from the coronavirus outbreak is a one-time event that will not last beyond 2020.

The two-year US Treasury yield, which typically moves in step with interest rate expectations, was up 2.5 basis points at 1.4417 % in afternoon trading.