NEW YORK (CNNMoney.com) - The 30-year bond gained Thursday afternoon, reversing an earlier decline as the first new auction in nearly five years drew heavy interest.

The 30-year rose 18/32 to 110-25/32, yielding 4.64 percent, down from 4.68 percent the previous session.

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The 10-year note was flat at 99-22/32 to yield 4.53 percent, little changed from late Wednesday. Bond prices and yields move in opposite directions.

The two-year note was flat, yielding 4.64 percent. The five-year note rose two ticks, yielding 4.53 percent.

The $14 billion offering is part of $48 billion the government is selling this week, partly driven by the need to cover growing deficits. (For more on the deficit angle, click here)

Indirect bidders, which include bids placed by foreign central banks and monetary accounts through a submitter, swallowed up 65 percent of the deal, assuaging fears about a possible waning of offshore demand for Treasuries.

"The auction... showed that foreign appetite for our securities remain voracious, which in itself is another positive sign," Anthony Chan, managing director at JP Morgan Private Client Services, told Reuters.

Thursday's auction came as yields on short term notes have been higher than those on long term ones. That kind of move in bond yields, known as a yield curve inversion, can be a signal of slower economic growth -- or recession -- ahead.

But analysts have so far remained calm about the yield inversion, chalking up the high demand (and hence low yields) on long-term paper to a glut of capital on the worldwide markets after the stock market bubble burst in 2000, not a rush to the safe haven bond due to fears about the global economy.

Bonds fell earlier in the day after the Labor Department said Thursday the number of U.S. workers making new claims for state unemployment benefits rose 4,000 to 277,000 in the week ended Feb. 4. Wall Street analysts had forecast a larger increase to 285,000.

Fewer people filing for unemployment indicate a stronger job market, which could put pressure on wages and lead to inflation. Inflation hurts bonds as it erodes the value of the fixed interest-paying investment.

In currency trading, the dollar fell slightly against the euro and yen.

The dollar bought ¥118.88, down from ¥118.53 late Wednesday. The euro bought 1.1970, up from 1.1951.

--from staff and wire reports

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For bond charts, click here.