U.S. Treasury yields rose during Asian trading hours Friday but stayed below Thursday's multiyear highs, with the upward trend driven by factors that reinforce market expectations for further interest-rate increases by the Federal Reserve.

Following last week's 25-basis-point interest-rate rise, which brought the fed funds target rate range to 3.75%-4.00%, money markets currently price in a 73% probability of another 25-basis-point rate hike at the October meeting, according to LSEG.

"The 10-year Treasury yield is being pushed higher by a confluence of factors: stronger economic data, heightened Middle East tensions, discussion of a potential diesel export ban, and a weak five-year Treasury auction," said Mike Sanders, head of fixed income at Madison Investments.

"The combination of fiscal, economic, geopolitical, and supply-side inflation pressures converging has bond markets in less familiar territory," he said, adding that the recent rise in yields can no longer be attributed simply to concerns over the fiscal deficit.

The 10-year Treasury yield last traded 1.3 basis points higher at 5.174%, below Thursday's intraday high of 5.225%, the highest level since mid-2007, according to Tradeweb data.

The 30-year Treasury yield increased 0.4 basis point to 5.466%, staying below Thursday's peak of 5.502%, the highest since 2004.

The Fed's decision last week to raise rates by 25 basis points reinforces a reality bond investors have been confronting for much of 2026: rates have moved meaningfully higher, and the path lower remains uncertain, Karen Manna, fixed income strategist at Federated Hermes, said in a note.

Multiyear high U.S. Treasury yields are reflecting a combination of resilient economic growth, persistent inflation concerns, elevated fiscal deficits and a market that continues to reassess where "normal" interest rates should reside, she said.