Heavy selling in government bonds hit full swing early on Thursday, as yields rose with a speed and ferocity that was once considered rare for a safe-haven market.
The yield on the benchmark 10-year German Bund and U.S. Treasury rose to its highest levels for the year in early trade, while in Asia the 10-year Japanese government bond (JGB) yield hit a six-month high. Yields move inversely to prices.
Later in the day, bonds pared losses, with yields on 10-year Treasurys down to 2.311 percent from a peak of 2.425 percent.
"We are watching this sell-off very closely," Francois Savary, head of asset services at investment firm REYL & CIE, told CNBC Europe's "Squawk Box."
"The fact that we have had a change of course in inflation, when people were talking about deflation, deflation, deflation at the end of 2014 and the first quarter of 2015, is the main reason why we were fearful," he said.