Spanish 10-year bond yields rose above 6% and German yields sank to a record low on Friday after Spain's debt auction in the previous session failed to ease longer-term doubts over the country's fiscal health.
The 10-year Spanish yield hit 6.03%, up 11 basis points on the day. Equivalent Italian and French yields also rose.
German Bunds benefited from the deteriorating sentiment, driving 10-year yields to a new low of 1.597% and the June future contract to a record high of 140.82, up 20 ticks on day.
Spain does not need to tap the euro zone's rescue fund to shore up its banks, the country's economy minister, Luis de Guindos, was quoted as saying also on Friday.
De Guindos met with European Central Bank President Mario Draghi and the ECB's Executive Board earlier this week to discuss Spain's finances as pressure mounts on it in financial markets amid fears it will not be able to get its debts under control.
In an interview with German business newspaper Handelsblatt published on Friday, de Guindos reiterated the message from Spanish authorities that the country does not need a bailout.
"We will need no money from the rescue funds to refinance the banks," de Guindos said, adding that Spain had been penalized by financial markets in recent weeks as fears about a deeper-than-expected European recession had grown.
