Benchmark U.S. Treasury yields traded above 2 percent on Thursday after the Treasury Department sold $29 billion in seven-year notes at a high yield of 1.792 percent.
Demand during the auction was weak as the bid-to-cover ratio, an indicator of demand, was 2.32, down from a recent average of 2.50. Wednesday's five-year notes auction also saw weak demand, as the bid-to-cover ratio the lowest since July 2009.
Indirect bidders were 50.5 percent, slightly higher than a recent average of 49 percent, while direct bidders made up 12.3 percent, down from the recent average of 15 percent.
The seven-year Treasury note yield last traded at 1.7800 percent, up from 1.7776 shortly after the auction. Yields on the 30-year Treasury traded higher at 2.5833 percent. Ten-year note yields last traded at 2.0009 percent.
Thursday's auction was the final auction of this week's sale of $90 billion worth of fixed-rate instruments issued in two-, five- and seven-year securities.
Earlier, U.S. Treasury yields rose amid lower-than-expected jobless claims. The number of Americans filing new claims for unemployment benefits fell more than expected last week pointing to a healthy and expanding labor market.
Initial claims for state unemployment benefits dropped 9,000 to a seasonally adjusted 282,000 for the week ended March 21, the Labor Department said on Thursday. That was the lowest level since mid-February.
Claims for the prior week were unrevised. Economists polled by Reuters had forecast claims dipping to 290,000 last week.