The yield on benchmark U.S. 10-year Treasury notes shed 0.2 basis point to 4.794% and was on track to snap its longest streak of daily gains since March. The yield hit an earlier high of 4.818%, its highest since November 1, 2023.
The yield on 10-year Japanese government bonds held above 3% for a second straight session after hitting a three-decade high earlier this week.
Traders have recently increased bets on a Federal Reserve interest rate hike. They now assign a roughly two-in-three chance that the Fed will deliver a 25-basis-point rate increase this month, up from 37% a week ago, according to CME Group's FedWatch tool.
Ahead of the Fed's September 15 to 16 meeting, investors are looking to upcoming U.S. economic data for clues on whether the economy remains strong enough to justify monetary policy tightening. The key monthly U.S. jobs report is due on Friday.
On Wednesday, the U.S. ADP National Employment Report showed private employment rose by 38,000 jobs last month, below the 48,000 increase expected by economists polled by Reuters, after an upwardly revised 46,000 in July.
"We're in this situation now where policy becomes very difficult, and then you get data like today in the ADP number, which was a miss, showing a pretty slow pace of growth," said Thomas Urano, co-chief investment officer at Sage Advisory in Austin, Texas.
Policy meetings of the European Central Bank and the Bank of Japan will also be closely watched as markets gauge how far major central banks are prepared to tighten policy in response to persistent inflation risks.
Hawkish BOJ board member Hajime Takata said on Wednesday that the central bank should conduct interest rate hikes nimbly to counter intensifying inflationary pressures, rather than adhere to a fixed semiannual pace anticipated by markets.
In the metals market, spot gold rose 1.33% to $4,386.29 an ounce.
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