Hopes that European leaders will finally settle on a deal next week to prevent a default in Greece sent Treasury prices lower Friday.
The yield on the benchmark 10-year note rose to 2.01 percent, versus 1.99 percent late Thursday. Its price fell 22 cents per $100 invested.
European finance officials are meeting Monday to discuss a second bailout package for Greece. Without it the country could default on its debt next month. U.S. markets will be closed Monday for Presidents' Day.
German Chancellor Angela Merkel, Greek Prime Minister Lucas Papademos and Italian Premier Mario Monti held a conference call and are "optimistic" the rescue package can be cleared.
Demand for low-risk Treasurys diminished as investors became more optimistic that a resolution of Greece's long-simmering debt fiasco could be near.
In other trading, the yield on the 30-year bond rose to 3.16 percent from 3.14 percent. Its price fell 34 cents per $100 invested. The yield on the two-year note was flat at 0.27 percent.
The three-month T-bill paid a yield of 0.08 percent.
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