Treasuries snapped a decline from yesterday as investors sought the relative safety of U.S. debt before Italy sells as much as 5 billion euros ($6.6 billion) of bonds today.

Spanish 10-year yields surged as high as 6 percent yesterday, approaching the levels that pushed Greece, Ireland and Portugal into bailouts, and the extra yield over German bunds held above 400 basis points. Italy’s auctions today will be a test of appetite for bonds from the euro region’s most indebted nations. The U.S. is scheduled to auction $13 billion of 30-year bonds today.

“Treasuries are being driven by the flight to quality from Europe,” said Tomohisa Fujiki, a rate strategist at BNP Paribas Securities Japan Ltd. in Tokyo. The company’s U.S. arm is one of the 21 primary dealers that are required to bid at the government debt auctions.

U.S. 10-year yields fell two basis points, or 0.02 percentage point, to 2.02 percent as of 10:05 a.m. in Tokyo, according to Bloomberg Bond Trader prices. The 2 percent security maturing in February 2022 rose 1/8, or $1.25 per $1,000 face amount, to 99 26/32. The rate increased five basis points, or 0.05 percentage points, yesterday.

Federal Reserve Vice Chairman Janet Yellen endorsed the central bank’s “highly accommodative” policy, saying it probably won’t achieve its goal of full employment for years, while inflation remains in check.

“Over the next several years, I anticipate that we will fall far short in achieving our maximum employment objective, and I expect inflation to remain at or below” the Fed’s 2 percent target, Yellen said yesterday in a speech in New York. She said housing and the European debt crisis are among “significant headwinds” that may restrain growth.

The U.S. Labor Department is scheduled to report producer prices today and consumer prices tomorrow.

To contact the reporter on this story: Wes Goodman in Singapore atwgoodman@bloomberg.net.

To contact the editor responsible for this story: Rocky Swift at rswift5@bloomberg.net

• Asian Stocks Rise on Faster Japan Inflation, U.S. Outlook   (2014-05-30 09:33:27)
• Asian Stocks Rise on Faster Japan Inflation, U.S. Outlook   (2014-05-30 09:33:27)
• Asian Stocks Rise on Faster Japan Inflation, U.S. Outlook   (2014-05-30 09:33:02)
• Asian Stocks Fluctuate After Japan Retail Sales Slump   (2014-05-29 09:37:51)
• Asian Stocks Fall Second Day as Health-Care Shares Drop   (2014-04-08 08:52:58)
• Industrial Stocks Take ETF Bounty   (2014-04-08 08:52:29)
• Asian Stocks Set for Second Weekly Gain Before U.S. Jobs   (2014-04-04 09:46:16)
• Australia Model Curbs Speed as CEO Says U.S. Too Far Gone   (2014-04-04 09:45:49)
• Asia Stocks Rise 4th Day as Consumer Shares Lead Gain   (2014-03-31 10:48:33)
• Asia Stocks Swing After U.S. Manufacturing Index Falls   (2014-03-25 11:29:14)