Yields on US 30-year bonds hit session highs after a weak auction of 30-year bonds. Traders earlier sold the bond to boost the yield, which moves inversely to the price, so they can buy it at a lower price at the auction in a practice known as "concession."

But the "concession" was not enough to entice buyers.

Traders had expected a poor 30-year auction given the fact that the bond has not been sold off enough and speculative investors amassed long positions leaving little room for an upside.

On Thursday, the Treasury's $12 billion, 30-year bond reopening fetched a yield of 2.936 percent, higher than market expectations of 2.926 percent at the bid deadline.

Bids totaled $27.7 billion for a bid-to-cover ratio of 2.31, little changed from last month's 2.32. Indirect bidders, which include foreign central banks, accepted 61.7 percent, lower than last month's 63.7 percent and the 62.7 percent average.

Treasury yields were also lifted after Germany's 10-year bond yield rose above 0.50 percent following a report that the European Central Bank was likely to signal in September that it will gradually unwind its asset purchase program next year.

"It has been a continued grind lower in prices, part of it is Europe," said Justin Lederer, Treasury analyst at Cantor Fitzgerald in New York.

Also on Thursday, Federal Reserve Chair Janet Yellen testified for a second day on the US economy, appearing before the Senate Committee on Banking, Housing and Urban Affairs.

Yellen covered much of the same ground as her session with a House committee on Wednesday where she said the Fed's plans for further gradual rate increases and a slow drawdown of its balance sheet remain on track.

US Treasury yields fell on Wednesday after Yellen's testimony before the House committee.

Treasuries also took their cue from Thursday's US data, which were steady overall, with jobless claims dropping to 247,000 for the week ended July 8. US producer prices, on the other hand, gained 0.1 percent in June, with core prices also

Yields rose slightly on the economic data.

In late trading, the 10-year Treasury yield was at 2.346 percent, up from 2.327 percent late Wednesday.

US 30-year bond yields rose to 2.918 percent, from 2.894 percent on Wednesday.

At the front-end of the curve, the two-year yield was at 1.367 percent, up from Wednesday's 1.351 percent.