US Treasury yields add to gains after Yellen remarks

U.S. government debt prices came under more pressure on Friday after Federal Reserve Chair Janet Yellen said in a speech that hiking rates this year would be appropriate.

"I expect it will be appropriate at some point later this year to take the first step to raise the federal funds rate and thus begin normalizing monetary policy," Yellen said, according to Reuters.

"But I want to emphasize that the course of the economy and inflation remains highly uncertain...We will be watching carefully to see if there is continued improvement in labor market conditions, and we will need to be reasonably confident that inflation will move back to 2 percent in the next few years," she added.

Yields, which move inversely to prices, on 10-year Treasury notes ticked up to 2.417 percent after Yellen's speech, having traded at 2.379 percent prior. Thirty-year bond yields also traded up at 3.203 percent after the speech

Yellen's remarks also led to the yield on 2-year Treasury notes to hit a session high of 0.673 percent. The notes had yielded 0.621 percent ahead of Yellen's speech.

"Janet Yellen in her speech still seems to be looking for the perfect opportunity in raising rates that doesn't exist..." Peter Boockvar, chief market analyst, said in a note.

Earlier,Treasury yields were bolstered by a Chinese stocks bounce and a new Greece reform plan being table, which could lead to deal with creditors by the weekend.

The 10-year Treasury note yield ended Thursday around 2.3 percent following the news that Greek Prime Minister Alexis Tsipras had delivered a fresh bailout proposal. International creditors will review the plan ahead of a "final" deadline on Sunday.

US 10-YR
US 30-YR

If no deal is reached, it would increase the chances of Greece leaving the euro zone in a so-called "Grexit." However, hopes of a deal are high, and pushed the market rebound in China into a second day.

Prices were also eased after the Treasury sold $13 billion of 30-year demand to fairly flat demand on Thursday.

On the data front, wholesale inventories rose 0.8 percent in May, beating estimates, according to the Commerce Department.

—Reuters contributed to this report.