Indirect bidders, which include major central banks, were awarded 58 percent, well above the 53 percent average. Direct bidders, which includes domestic money managers, bought 12 percent, on trend with recent averages.
"[D]irect and indirect bidders took a total of 70 percent of the auction versus the one-year average of 63 percent. Bottom line, with yields near nine-month highs the auction was well-received," said Peter Boockvar of The Lindsey Group.
"We'll see if this area around 2.50 percent now establishes an upper end of the new range, but Treasurys on the day are still negative with yields higher."
Read MoreA sorting out: What does it all mean?
Overall demand at the auction was the highest since December. The sale is the second batch of the Treasury's $58 billion debt offering this week. Treasury yields rose on Tuesday after the Treasury Department auctioned $24 billion in three-year notes at a high yield of 1.125 percent—the highest in four years.
Yields on Treasurys gained momentum earlier as a rise in the benchmark 10-year bund yield kept up the pressure on the U.S. bond market. Bund yields pushed above 1 percent for the first time since last September.
"Bund yields are in the driving seat with U.S. Treasurys following, when it used to be the other way around," Christoph Rieger, head of rate and credit research at Commerzbank, told CNBC.
Government bonds in both Europe and the U.S. have come under heavy selling pressure over the past week amid a growing perception that a pickup in economic activity and inflation means that ultralow debt yields are no longer justified.
In addition, Friday's stronger-than-expected U.S. nonfarm payrolls report and further signs this week of strength in the jobs market has renewed talk that the Federal Reserve is likely to raise interest rates this year—putting further upward pressure on Treasury yields.
Read MoreTreasury Department auctions $24 billion of 3-year notes
U.S. stock markets rose more that 1 percent and the U.S. dollar index, which measures the greenback's value against a basket of other major currencies, hit a three-week low.
Weekly mortgage applications surged amid higher interest rates, the Mortgage Bankers Association said. Total mortgage application volume jumped 8.4 percent on a seasonally adjusted basis for the week ended June 5 from the previous week.
—CNBC's Diana Olick contributed to this report.