Prices of benchmark Japanese government bonds fell steeply Tuesday, at one point sending yields to their highest levels in 2 1/2 years.

In interdealer trading, the yield on the No. 252 10-year JGB, regarded as Japan's key long-term interest rate, rose to 1.670 percent, the highest yield on a benchmark issue since December 2000.

It was sharply up from 1.58 percent late Monday and almost four times the historic low of 0.43 percent seen in early June.