The U.S. Treasury Department saw soft demand for a $16 billion sale of 20-year bonds on Wednesday with investors worried about the country's increasing debt burden as Congress wrangles with a tax and spending bill that is expected to worsen the fiscal outlook.

Longer-dated U.S. Treasury yields hit their highest in 18 months on Thursday, while Asian stocks and the dollar slipped as worries of a worsening fiscal outlook in the world's biggest economy weighed on investor sentiment.