US Treasury debt prices fell for a second straight session on Wednesday as buyers' resistance to higher prices spawned a wave of profit-taking.
Yields, which move in the opposite direction of prices, had fallen to six-month lows late last week and investor appetite for the securities seemed sated, analysts said, as evidenced by repeated failures to break recent lows on yields.
"The market couldn't go much further - the 10-year note yield can go down to 3.75 percent at best," said Credit Suisse First Boston interest-rate strategist Dominic Konstam.
The benchmark 10-year Treasury note yield dipped as low as 3.96 percent last week.
After Wednesday's sell-off, the 10-year yield was up to 4.10 percent from 4 percent on Tuesday.
Bonds were also hurt by a pullback in oil prices following news that US crude stocks rose more than expected in the latest week. Since they have been viewed as a potential restraint on economic growth, rather than as an inflation impetus, higher energy costs have tended to support prices of fixed-income debt.
Traders said speculators cut long positions after failing to clear a six-month yield trough at 3.96 percent, while Japanese investors took profits for half-year book closing.
Sellers got an extra excuse to sell when the government revised its estimate of second-quarter gross domestic product growth upward, though in the market's mind, the data were a little wilted given that the third quarter is now almost over.
US second-quarter GDP growth was revised up to an annual 3.3 percent from the preliminary reading of 2.8 percent, thanks to a smaller drag from trade and a larger contribution from inventories.
The current two-year note fell 5/32 in price, boosting its yield to 2.60 percent from 2.52 percent.
Five-year notes fell 13/32, driving yields to 3.36 percent from 3.27 percent. The 30-year bond lost 1-5/32, lifting yields to 4.86 percent from 4.80 percent.