US Treasury prices fell last week, with the 10-year yield jumping 22.7 basis points to 1.594 percent.
The fall last week reversed the rally that had sent yields to record lows.
Analysts are divided on where bonds go from here.
Last week, Tom di Galoma, managing director at Seaport Global Holdings, lowered his 10-year yield outlook for the next six to nine months from 1.4 percent to 0.9 percent.
“Treasurys are just too cheap compared to a lot of global debt,” said di Galoma. “As the yields on global debt get more and more negative, we will rally more and more.”
Buying from Japanese investors appears to have been a major driver of the rally. Japan’s Ministry of Finance reported on Wednesday that Japanese investors last week bought $25.4 billion worth of US debt.
However, James Kochan, chief fixed-income strategist at Wells Fargo Funds Management, thinks that the 10-year yield will end the year between 1.75 percent and 2 percent as the US economy shows signs of improvement.
“The post Brexit [global] rally was temporary,” said Kochan. “But the selloff would come domestically.”