By Akane Otani 

U.S. government bond prices rose as an uptick in geopolitical tensions drove investors into the safety of sovereign debt.

The yield on the benchmark 10-year U.S. Treasury note settled at 3.003%, compared with 3.065% Tuesday, notching its largest one-day decline since March 22.

Yields, which fall as bond prices rise, declined overnight as investors weighed uncertainty over a potential summit with North Korea, trade talks between the U.S. and China, and questions over the Turkish central bank's reluctance to raise interest rates to combat high inflation, which sent the Turkish lira to a fresh low Wednesday.

The resulting pullback across relatively risky assets -- which pulled stocks in emerging markets, Europe and U.S. lower -- helped drive up demand for Treasurys, whose fixed returns look particularly attractive to investors when the outlook for global growth looks uncertain.

"The global market remains unstable. Whether it is about Italy, Turkey, the EU, China, North Korea, trade or the old fashioned U.S. of A., investors should remain balanced in their approach, not pushing 'all-in' just because it 'feels right'," Kevin Giddis, head of fixed income capital markets at Raymond James, wrote in a note.

The yield on the 10-year Treasury note then extended declines slightly after the Federal Reserve released minutes from its May 1-2 meeting, which provided some clues on the central bank's thinking on the path of interest rates.

The Fed minutes showed officials believed letting inflation run above 2% for a temporary period "would be consistent with the Committee's symmetric inflation objective and could be helpful."

Signs that the Fed might be willing to let inflation run above its 2% target without necessarily picking up its pace of interest-rate increases seemed to help nudge bond prices higher, analysts at BMO Capital Markets said, although they warned further acceleration in inflation readings would likely push the Fed to "get more aggressive."

Write to Akane Otani at akane.otani@wsj.com

(END) Dow Jones Newswires

May 23, 2018 16:26 ET (20:26 GMT)