Germany's benchmark 10-year bond yield on Wednesday approached the record euro-era low it struck on Monday, as investors slashed Greek exposure as the Hellenic Republic edged closer to leaving the currency bloc.

The German bond's yield fell to 1.44 percent, just over the 1.43 it struck just two days ago, before rebounding to 1.49 in afternoon trading.

The flight-to-quality sentiment is supporting bunds, David Schnautz, a fixed-income strategist at Commerzbank AG in London, told Bloomberg News. The current yield level is no hurdle for bunds as capital preservation is the name of the game.

U.S. and German bonds are safe-haven investments. A lowering yield indicated investors are worried about economic conditions and purchased low-profit bonds in order to protect their capital. Likewise yield on bonds issued by countries with high debt and low or negative economic growth tend to rise.

The spread between the German Bund and Spain's 10-year bond yield widened to a record 507 basis points before receding after Spanish Prime Minister Mariano Rajoy said his country risks being unable to borrow, or being forced to borrow at unaffordable rates if conditions in the currency bloc worsen.

The spread has risen a lot, which means it's very hard to finance oneself and to do so at a reasonable price, Rajoy said in a speech to Parliament, according to El Pais.

A wider spread means the cost of borrowing money is higher for the issuer of the riskier bond. Spain and Italy are considered to be more exposed to the negative outcome of Greece leaving the euro.

Italy's 10-year yield followed Spain's, breaking over 6 percent for the first time in over two months. The Italian bond spread against the German Bund widened by over 400 basis points.

Italian and Spanish five-year credit default swaps rose as investors scrambled to buy insurance against bonds losses, according to Reuters.

Meanwhile, the U.S. benchmark 10-year note -- a key safe-haven investment -- was trading low (which raises its yield), but the ongoing and growing concern in the euro zone is preventing investors from moving too far away from the safety of U.S. debt.