NEW YORK: US Treasury prices fell on Thursday as investors reduced their bond holdings in advance of a $15 billion sale of 30-year bonds, the final leg of the government's $62 billion quarterly refunding this week.
The 30-year bond sale follows solid demand at the three-year and 10-year auctions earlier this week.
The Treasuries market was also under pressure from a wave of corporate bond supply. Companies have raised nearly $30 billion in investment-grade debt this week, bringing the monthly total to $76.9 billion, according to IFR, a Thomson Reuters unit.
"There's definitely supply concession with the 30-year and corporate supply," said Stan Sun, interest rate strategist at Nomura Securities International in New York.
A drop in weekly US jobless claims also underpinned selling in Treasuries as it supported the view of an improving labor market, keeping alive the possibility the Federal Reserve may raise interest rates by year-end.
The price decline in US bonds was limited by steady yields in Britain, where 10-year gilt yield last traded at 0.535 percent.
The Bank of England's renewed purchases of British government debt, which began this week in an effort to help the economy in the aftermath of June's Brexit referendum, have intensified demand for longer-dated Treasuries.
In early US trading, benchmark 10-year Treasury notes were down 6/32 in price for a yield of 1.522 percent, up 2 basis points from late on Wednesday.
The 30-year bond was 14/32 lower in price, yielding 2.246 percent, up 2 basis points from Wednesday.
Trading volume was lighter than usual with Japanese markets closed for a public holiday.
In "when-issued" activity, traders expected the upcoming 30-year bond issue to sell at a yield of 2.254 percent.
At the prior 30-year auction in July, the US Treasury Department paid investors and dealers a record low yield of 2.172 percent.