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imageNEW YORK: US Treasury yields rose on Thursday, reversing earlier bond strength, after a manufacturing survey showed economic improvement and as Federal Reserve Vice Chairman Stanley Fischer cited rising inflation and wage pressures.

Treasuries have rallied in recent weeks as a weaker-than-expected March employment report and other data pointed to slowing growth that is expected to keep the Fed on hold for longer.

Investors have also been reluctant to have large exposure to the bonds, however, on the risk that yields may rise if the economy rebounds from a weak first quarter.

"The minute bond prices moved up, people started selling again," said interest rate strategist Jim Vogel of FTN Financial in Memphis, Tennessee.

Yields began increasing after a Philadelphia Federal Reserve Bank survey on Thursday showed that factory activity in the US mid-Atlantic region accelerated in April.

Fed Vice Chairman Stanley Fischer also said in an interview on CNBC that the US economy was rebounding and that he saw signs that wage pressures are rising, bringing inflation up toward the central bank's 2 percent target.

Some investors are nervous about buying bonds before Friday's consumer price index release. Low inflation is seen as complicating the Federal Reserve's ability to hike interest rates, although the last two CPI releases have beaten expectations and caused selling in US Treasuries.

"Nobody wants to step into buy in front of CPI in case it surprises and exceeds forecasts yet again," said Vogel.

Benchmark 10-year notes were last down 7/32 in price to yield 1.92 percent, up from 1.87 percent earlier on Thursday.

Repositioning and a few large trades may have been behind a large part of Thursday's move, said Sean Murphy, a Treasuries trader at Societe Generale. "The market has been buying earlier, and now their positions are off side," he said.

Ten-year Treasury yields also remain in the middle of a range between 2.02 percent and 1.83 percent, where they have traded for the past month.

Concerns about the standoff between Greece and its creditors added a safety bid to Treasuries earlier in the day. It was also seen as helping the yield curve steepen as international uncertainties are among the headwinds that may lead the US central bank to push back a rate hike.

The curve between five-year note yields and 30-year bond yields increased to 125 basis points, the widest since April 6.

Copyright Reuters, 2015