The Treasury received $579.2 billion of direct bids this year and $677.8 billion from indirect bidders, totaling $1.26 trillion. The last time their demand was higher was in 2010 when they bid for 91 percent. In 2008, there were $25.4 billion of direct and $318.1 billion of indirect bids, or 37 percent of the $922 billion of coupon securities offered.

The yield on the benchmark 10-year note fell 15 basis points last week, or 0.15 percentage point, to 2.74 percent as the Fed decided not to trim its $85 billion monthly bond purchases. Yields touched 3 percent last month, up from this year’s low of 1.61 percent in May, as Fed Chairman Ben S. Bernanke said the central bank would consider reducing or ending its stimulus.

Bond Losses

Treasuries of all maturities have lost an average of 2.95 percent this year, according to the Bloomberg U.S. Treasury Bond Index. They are up 0.36 percent this month.

Foreign official holders, including central banks and finance ministries, which make up part of the indirect bidding total, held $4 trillion of Treasuries as of July, up from $1.64 trillion at the end of 2007, government data show.

International demand is being fueled in part by a desire for dollar-denominated assets. The Bloomberg Dollar Index shows the world’s reserve currency has risen 2.7 percent this year, the most in five years.

Many direct bidders don’t want to be identified because of concern that they may suffer repercussions from the 21 primary dealers of U.S. government securities.

Officials at Pacific Investment Management Co. in Newport Beach, Calif., the world’s largest bond fund manager and which invests about $2 trillion, said while they like direct bidding, Pimco still places most of its auction orders through dealers because they’re better able to handle bids for funds with multiple accounts and custodians.

Yield Attraction

Pension funds, which need the predictable streams of principal and interest from bonds to pay retirees, as well as insurers who match bond purchases to cover underwriting claims, have been drawn back to Treasuries by the higher yields, William O’Donnell, the head U.S. government bond strategist at primary dealer RBS Securities Inc. in Stamford, Conn., said in a Sept. 17 phone interview.