Eurozone government bond yields rose in early trade Wednesday as Brent crude oil touched $100 a barrel and with investors anticipating a quarter-point interest-rate increase by the European Central Bank on Thursday.

U.S. Treasury yields edged lower ahead of an announcement by the U.S. Treasury on the size of its long-dated bonds buyback operation. The dollar also fell, weighed down by further gains in the Japanese yen. The DXY index, which measures the dollar's value against a basket of currencies, dropped 0.2% to a near three-week low of 98.617 as the yen hovered close to a six-month high against the U.S. currency.

Continuing military escalation between the U.S. and Iran drove the latest rise in oil prices, briefly pushing Brent just above $100. The U.S. destroyed five Iranian oil tankers on Tuesday in response to fresh attempts by Tehran to strike U.S. warships in the Middle East in recent days, according to U.S. Central Command.

"Higher oil prices are the main macro theme," KBC Bank analysts said in a note.

The 10-year Bund yield rose 1.7 basis points to 3.373%, albeit staying below a new 15-year high of 3.398% reached on Tuesday, according to Tradeweb. The 10-year Treasury yield fell 0.4 basis points to 4.799%.

"Euro rates continue to trade largely as a function of energy rather than domestic fundamentals," Evelyne Gomez-Liechti, multi-asset strategist at Mizuho said in a note.

Both Germany and the U.S. face a test of investor appetite on Wednesday with their respective 10-year debt auctions. The German Finance Agency will offer 5.5 billion euros ($6.39 billion), while the U.S. Treasury will auction $39 billion.

In the U.S., the Treasury is scheduled to announce Wednesday the size of its buyback operation of 10-year notes and 20-year bonds.

The Treasury recently announced an increase in long-end debt buybacks to at least $4 billion per operation, up from $2 billion. The move signaled the Treasury's unease at high borrowing costs and helped to bring down long-dated U.S. government-bond yields from lofty levels.

"Expectations have risen materially since the Treasury indicated purchases in the 10-30-year sector would at least double, with the market increasingly leaning towards a larger-than-minimum operation," said Mizuho's Gomez-Liechti.

Meanwhile, investors in the eurozone await the ECB's decision on Thursday and its accompanying explanation.

"We expect the ECB to raise rates by 25 basis points to 2.50% on Thursday, but this could mark the final hike of the cycle unless energy prices continue to rise," David Zahn, head of European fixed income at Franklin Templeton said in a note.

"The ECB began tightening relatively early, and the combination of higher bond yields and elevated energy costs should weigh on European growth in the near term, giving policymakers scope to remain on hold."

As the rate hike is close to a done deal, investors will watch for the ECB's new GDP and inflation forecasts, and any signals on the future rate path.