U.S. government bond yields inched off session highs on Thursday as the U.S. government's auction of seven-year Treasury notes met solid demand.
The Treasury Department auctioned $29 billion in seven-year notes at a high yield of 2.153 percent. The bid-to-cover ratio, an indicator of demand, was 2.38, below the 2.46 recent average.
Seven-year note yields were trading at 2.12 percent, compared to 2.15 percent before the announcement. Benchmark 10-year note yields were at 2.39 percent, versus 2.42 percent earlier.
Indirect bidders, which include major central banks, were awarded 56.5 percent, the biggest slice since December 2010. Direct bidders, which includes domestic money managers, brought 11.9 percent, versus a recent average of 13 percent.
Prices slipped tumbled earlier on renewed optimism that Greece would avert a debt default after the country's international creditors presented a final cash-for-reform proposal to euro zone finance ministers.
Euro zone finance ministers will work on a financing-for-reforms deal with Greece on the basis of a proposal from the creditor institutions as negotiations with Athens have produced no agreement, officials said.
"The main thing is Greece, and the market is still going to move to some degree, up and down, based on the headlines," said Lou Brien, market strategist at DRW Trading in Chicago.
Analysts said that while the slight weakness in Treasurys prices was due to optimism over a Greek debt deal, traders' uncertainty over the outcome of negotiations capped losses and prices were likely to remain volatile in response to developments out of Greece.