The latest producer price readings, together with U.S. oil futures climbing above $50 a barrel, stoked demand for Treasury Inflation-Protected Securities (TIPS).
Their yield differences between TIPS and regular Treasuries grew to their widest in more than week on reduced anxiety about the U.S. economy being disrupted by disinflation.
In choppy trading, benchmark 10-year Treasuries were last 1/32 lower in price with a yield of 1.840 percent, up 0.5 basis point from late on Wednesday.
Its yield premium over 10-year TIPS expanded by 4 basis points to 1.61 percent.