Treasury yields fluctuate as oil prices rise

U.S. government debt prices gyrated between gains and losses on Thursday as crude prices rose after back-to-back sell-offs.

The yield on the benchmark 10-year Treasury note sat slightly lower at 2.153 percent at 2:35 p.m. ET, while the yield on the 30-year Treasury bond rose to 2.727 percent. Bond yields move inversely to prices.

Crude futures for August delivery climbed 0.49 percent to settle at $42.74 a barrel. On Wednesday, oil hit its lowest level since August as investors remained concerned about a supply glut in the market. The commodity also fell more than 2 percent during Tuesday's session.

Yields had also been falling in the past two sessions.

US 10-YR
US 30-YR

"One of the themes being pushed is that the decline in oil may have deflationary consequences," said Guy LeBas, chief fixed income strategist at Janney Montgomery Scott.

On the data front, jobless claims hit 241,000, just above the expected 240,000 number. The Kansas City Fed Manufacturing Index rose to 23 in June from -1 in May.

In Asia, the Bank of Japan's Deputy Governor Kikuo Iwata rejected the desire to push interest rates higher in the near term, underlining how the Japanese economy still required support from "powerful" monetary easing, with inflation far from the central bank's 2 percent target, according to Reuters.

In the States, the Federal Reserve board is set to release the results from the latest supervisory stress tests conducted as part of the Dodd-Frank Act.

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