Traders continued to seek the safety of U.S. government bonds Tuesday as fears mount over the crisis in Japan.
But Treasury prices dipped in the afternoon after the Federal Reserve said the economy was improving. In a statement released after its monthly meeting, the Fed said the economic recovery was on a "firmer footing."
The rush into Treasurys early Tuesday caused yields to drop to the lowest level this year. The yield on the 10-year note reached as low as 3.20 percent in overnight trading, the lowest rate since December. Yields fall when prices rise.
Signs of instability often lead global traders into Treasurys, as they represent debt backed by the world's largest economy.
Treasury yields retreated from their low levels by late Tuesday afternoon. Most yields remained lower for a second straight day.
The 10-year Treasury note rose 31.2 cents, with the yield falling to 3.32 percent from 3.36 percent late Monday.
The 30-year bond rose $1.06. Its yield fell to 4.47 percent from 4.54 percent. The yield on the two-year note inched up to 0.61 from 0.60 percent.
The yield on the 3-month bill was 0.08 percent. Its discount rate was 0.09 percent.