The yield on 10-year notes stood at 1.61 percent in European trade, up 2 basis points from late US levels and above a 10-week low of 1.572 percent hit on Tuesday.

If the White House and a divided Congress do not produce a deal on the federal budget before year-end, the series of automatic tax hikes and spending cuts known as the fiscal cliff will come into effect early in 2013, hitting economic growth.

President Barack Obama said on Wednesday that Republicans would have to agree to raise taxes on the wealthy as the first step in a budget deal. But top Republican lawmakers have been steadfast in pushing to hold down tax rates for top earners.

Few market players expect a compromise between the Democrats and the Republicans any time soon, suggesting firm support for Treasuries in coming weeks.

"Tens are a bit weaker but the market has risen quite sharply recently so there's a bit of profit-taking," one trader said. "President Obama's comments suggest there's little likelihood for a compromise any time soon so the market will be supported until fiscal cliff risks are out of the way."

A significant rise in Treasury yields was also limited after San Francisco Fed President John Williams' said late on Wednesday the Federal Reserve would likely keep buying both mortgage-backed securities and Treasuries until late 2013.

"The Japanese are still underlying buyers. Williams implying that QE3 is showing signs of working and maybe expanded next year is pretty supportive for the market as well," another trader said.

Minutes of the Federal Reserve policy meeting in October, in which a number of officials reckoned the central bank would need to ramp up its bond buying to help the economy, also gave Treasuries support.

The minutes showed a number of Fed officials thought the central bank would need to buy more bonds when its "Operation Twist" programme expires at the end of the year.