Traders reported one big seller in early trade, which in thin markets pushed 10-year yields around 5 basis points higher and through the 100-day moving average at around 1.74 percent.
"There's been selling out of Asia earlier and overnight," one trader said. "Those accounts are loaded up on Treasuries and just taking a little bit off."
Benchmark 10-year US Treasury yields were 4.5 bps higher at 1.78 percent, with T-note futures down 10/32 at 132-26/32.
Whether the higher yields are sustained is likely to depend on how this week's data releases compare to forecasts .
Later on Wednesday, US consumer inflation figures are expected to show price pressure remains benign, while industrial production is forecast to pick up pace.
"The risk is that there is a reasonable amount of decent data, equities perform and fixed income gets hit," a second trader said. "We'd expect to see some support coming in around current levels but if we break 1.80 percent then you're looking at 1.86 percent - the 200-day moving average."
Expectations remain that the Fed could eventually embark on a third round of quantitative easing through bond purchases, or QE3, but a steady run of better-than-forecast data may mean those steps come later -- or not at all. Data on Monday showed US retail sales rose 0.8 percent in July, beating a consensus estimate for a 0.3 percent gain.
"The main source of weakness in rate markets is stemming from US Treasuries," Credit Agricole strategist Peter Chatwell said in a note. "US data is continuing to surprise to the upside and, in combination with the strength of US equity markets, serving to reduce the case for QE3."