The 10-Year German government bond yield hit its highest level since March 2012. Above, German Bundeswehr soldiers at the Reichstag buildingThursday's economic data strengthened investors' expectations the Federal Reserve will pull back its stimulus program come September, a source of anxiety that has roiled bond markets all year. The number of people filing for unemployment benefits in the U.S. dropped to the lowest level since October 2007. Retail sales from the U.K. rose at a faster pace than economists' forecastsUpbeat data in the U.K. also has cast doubt over the Bank of England's ability to pump more cash into the economy. And signs the euro zone's economy is turning a corner are lowering expectations that the European Central Bank would roll out new stimulus programs.The 10-year German government bond yield rose to 1.881% and the 10-year U.K. government bond yield climbed to 2.684%, according to TradewebThe subdued pace of Thursday's selling after fierce declines in May and June is a sign the bond market has digested the possibility of the Fed's move to cut bond buying, traders said. In June, private foreign investors sold U.S. bonds, equities and other long term securities at record levels, according to a U.S. Treasury Department report released Thursday. That included net selling of $40.1 billion of Treasury bonds and notes.Compared with May and June, when investors feared the Fed might pull its support too quickly, now some traders see higher bond yields as a sign of a stronger global economy." Rising yields are a sign that the bond market believes the economic recovery to be self-sustaining,'' said Anthony Cronin, a Treasury bond trader at Société Générale. That, he said, adds to " nervousness" about the Fed starting to taper bond purchases.Over the past few weeks, reports out of China raised some optimism the world's second-largest economy may come out of a soft patch hit during the first half of the year. The euro zone emerged from a recession in the second quarter.