NEW YORK (CNNMoney.com) - Treasury prices climbed Thursday, buoyed by larger-than expected unemployment figures, and unhindered by weak demand at a government debt auction.

The dollar was down against the euro and yen.

The benchmark 10-year note was up 6/32 to 100-2/32 to yield 4.49 percent, down from 4.52 late Wednesday. The 30-year bond gained 11/32 of a point to 109-31/32 to yield 4.69 percent, down from 4.72 in the previous session. Bond prices and yields move in opposite directions.

In shorter-dated debt, the two-year note was up two ticks, yielding 4.38 percent, and the five-year note rose 8/32, yielding 4.39 percent.

The Labor Department reported early Thursday that state jobless claims in the week ended Dec. 3 climbed by 6,000 to 327,000. The jump was 10,000 more than analysts had projected. (Full story)

Treasury prices were unfazed however, by lackluster interest in a government offering of $8 billion in reopened 10-year notes.

"The auction was pretty bad," Bernard Tan, director of fixed-income at Fimat, told Reuters. "We rallied this morning so things started to look expensive."

Bonds hit one-month highs Tuesday on expectations that a decline in unit labor costs could hasten an eventual end to tightening by the Federal Reserve.

The Fed meets next Tuesday and is widely expected to raise its benchmark rate another 25 basis points to 4.25 percent.

The central has hinted that its monetary-tightening campaign may be coming to an end, but it could continue raising rates to combat inflation.

Inflation hurts bonds as it erodes the value of the fixed-income investment. But rising interest rates generally help the dollar as they make dollar-denominated securities more attractive to foreign investors.

In currency trading, the dollar has rallied about 14 percent against the euro and 18 percent against the yen this year, fueled largely by rising interest rates.

The euro bought $1.1786, up from $1.1724 late Tuesday. The dollar bought ¥120.59, up from ¥120.98 in the previous session.

-- from staff and wire reports.

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