By Akane Otani

U.S. Treasury yields fell Wednesday as fears of an emerging-market rout rippling into developed markets kept global investors cautious.

The yield on the benchmark 10-year U.S. Treasury note settled at 2.852%, compared with 2.893% Tuesday.

Yields, which fall as bond prices rise, slipped overnight and held on to their declines as major stock indexes in China, Europe and the U.S. lost ground and commodities prices tumbled.

The downbeat mood among equity investors helped stoke demand for Treasurys, which are often considered havens when the outlook for growth looks shaky. The recent collapse in the Turkish lira, which has taken a toll on other currencies such as the Indonesian rupiah, Mexican peso and South African rand, has raised fears among investors of a broader pullback from emerging-market assets. On Wednesday, Indonesia's central bank raised interest rates for the fourth time in three months, the latest measure that officials there have taken to attempt to bolster the country's currency.

"A weakening currency has foreign investors running for the hills, so it is a vicious downward cycle that is difficult for governments and their senior monetary officials to break free of and restore market and business confidence," said Chris Rupkey, chief financial economist at MUFG.

Worries about the global outlook persisted even as the lira rebounded Wednesday and upbeat economic data in the U.S. pointed to sustained resilience in the domestic economy.

Commerce Department data showed U.S. retail sales jumped 0.5% in July from the prior month to a seasonally adjusted $507.5 billion, extending a rebound in consumer spending that began in the second quarter. Economists surveyed by The Wall Street Journal had expected retail sales to rise 0.1% in July.

Despite the strong data, the yield on the 10-year Treasury remained lower for the day, suggesting investors are bidding up haven assets.

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

(END) Dow Jones Newswires

August 15, 2018 15:52 ET (19:52 GMT)

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