U.S. Treasury debt yields fell on Tuesday, as Europe's massive bond-buying program dropped yields there, adding to the relative value of U.S. Treasurys.
Yields on the benchmark 10-year Treasury note were last at 2.1262 percent, reflecting a price rise of 19/32, as bond yields in Ireland, Spain and other euro zone countries hit record lows.
"That relative value trade is what is driving the market, more than anything else," said Larry Milstein, head of U.S. government and agency trading at R.W. Pressprich & Co. in New York.
Germany's 10-year bund fell to a record low of 0.23 percent on Tuesday, the second day of European Central Bank purchases under a 1 trillion-euro program meant to revive inflation and economic growth.
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"If we are yielding 190 basis points better than Europe, that's an allure," said David Ader, head of government bond strategy at CRT Capital in Stamford, Connecticut. "You've also got, because of the lower European yields, the dollar on fire."
The dollar's months-long rally, including a 4.5 percent rise against the euro since March 1, should continue and give foreign investors a cushion against price losses on Treasurys, Ader said.
U.S. yields had been rising as institutional investors positioned ahead of a meeting next week of Fed policymakers, who are nearing the first increase in benchmark U.S. lending rates since 2006.
"They aren't going to raise rates at this meeting but they are going to change the language and pave the way," Ader said.
Price gains on Tuesday were biggest in longer-maturity Treasurys favored by yield-chasing foreign buyers, with the 30-year last up as much as 1-15/32 and yielding 2.7238 percent.
The seven-year was ahead 12/32 to yield 1.9402 percent, while the five-year's yield briefly traded below 1.60 percent and was last at 1.6098 percent, on a price gain for the session of 6/32, according to Thomson Reuters data.