After coming under pressure in early trading on Tuesday, treasuries showed a significant rebound over the course of the session to end the day modestly higher.
Bond prices climbed well off their early lows, eventually finishing the session in positive territory. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by 2 basis points to 2.195 percent.
Early in the session, the ten-year yield reached a high of 2.269 percent, its highest intraday level in well over a year.
The early weakness among treasuries was partly in reaction to the Bank of Japan's latest monetary policy decision.
Overnight, the Bank of Japan unanimously decided to retain its target of doubling the monetary base in two years but did not announce any new steps to curb bond market volatility.
Selling pressure was somewhat subdued, however, and treasuries subsequently rebounded as the high yield increased the appeal of bonds.
Treasuries saw some further upside in afternoon trading following the release of the results of the Treasury Department's auction of $32 billion worth of three-year notes.
The thee-year note auction drew a high yield of 0.581 percent and a bid-to-cover ratio of 2.95, while the ten previous three-year note auctions had an average bid-to-cover ratio of 3.55.
The bid-to-cover ratio is a measure of demand that indicates the amount of bids for each dollar worth of securities being sold.
Amid another quiet day on the U.S. economic front, trading on Wednesday could be impacted by the release of the results of the Treasury's auction of $21 billion worth of ten-year notes.
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Market Analysis
June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.