New Delhi, May 20 -- Indian government bond prices traded lower on Wednesday as rising US Treasury yields reduced the appeal of emerging-market debt, triggering capital outflows and pressuring domestic fixed-income markets.

The yield on the benchmark 6.48% 2035 government bond rose 1 basis point to 7.1205%. Bond prices and yields move inversely.

The move came amid a global selloff in sovereign debt, with the 30-year US Treasury yield climbing to a 19-year high on Tuesday, while the benchmark 10-year US Treasury yield touched a 16-month high of 4.6690%. As a result, the yield premium on Indian government bonds narrowed to 244 basis points, the lowest level in nearly two months.

Adding to market concerns, long-term Japanese government bo...