NEW YORK: US Treasury yields edged lower on Wednesday as new outbreaks of the novel coronavirus and rising geopolitical tensions in Asia boosted demand for the safe haven debt.

Benchmark 10-year yields have fallen from 11-week highs reached on June 5 when data showed that employers unexpectedly added jobs in May.

Optimism over a quick economic recovery has been tempered by an increase in global cases of the coronavirus, with a new outbreak in Beijing and a rising tide of cases in US states that are reopening their economies.

Bonds also gained a safety bid overnight as tensions between North Korea and South Korea increased. There have also been clashes between Indian and Chinese troops at a disputed border site.

"We had a run up (in price) last night on flight to quality," said Tom di Galoma, a managing director at Seaport Global Holdings in New York.

Benchmark 10-year notes yields were last 0.740%, after earlier falling to 0.725%. The yield curve between two-year and 10-year notes was little changed at 55 basis points.

The Treasury is due to sell $17 billion in 20-year bonds on Wednesday, the second auction since the maturity was reintroduced last month. Yields on the 20-year bonds were last 1.297%, and are down from a high of 1.541% on June 5.

The 20-year bonds are priced attractively relative to 10-year notes and 30-year bonds, which should help demand at the auction, said di Galoma.

Federal Reserve Chairman Jerome Powell will testify before Congress for a second day on Wednesday, after saying on Tuesday that a full US economic recovery will not occur until Americans are sure the novel coronavirus epidemic has been brought under control.

Data on Thursday showed that US homebuilding increased less than expected in May, leaving the bulk of the prior months' declines intact and pointing to a slow housing market recovery from the COVID-19 crisis.