TOKYO: US Treasuries stabilised in Asia trade on Friday after a weak 30-year bond auction the day before but the 30-year yield was expected to stay below 3 percent for the time being as Treasuries are still seen as comparatively safe assets.
The 30-year Treasury yield was at 2.97 percent, steady from late North American trade on Thursday.
"There is a feeling that no one wants to be buying right now, but some investors have to keep buying, anyway, with no where else to put funds at the moment, and this is going to keep pressure on yields for now," said a trader at a Japanese brokerage.
The Treasury sold $13 billion in reopened 30-year bonds at a high yield of 2.985 percent, awarding 69.8 percent of the bids at the high. The ratio of bids received over those accepted was just 2.6, below the average of 2.81 in the four most recent auctions and below an average of 2.68 in 2010, a strategist said.
Media reports saying that a Greek debt swap deal may be close also underpinned Treasury yields. A deal with private creditors to voluntarily write down at least half the value of their Greek sovereign bonds has a good chance of happening in the coming days, the chief executive of French bank Societe Generale told newspaper Les Echos.
The 10-year Treasury yield last stood at 1.93 percent , also steady from late North American trade on Thursday.
Strong bidding at Spanish and Italian sovereign debt auctions also supported Treasury yields, as this reassured investors about these countries' ability to sustainably fund their debt. Fears about Europe's debt crisis had increased safe-haven demand for Treasuries.
Also alleviating funding fears, the benchmark London interbank offered rate on three-month dollars fell for a fifth straight session.
Weekly data from Japan's Finance Ministry showed Japanese investors turned net buyers of foreign bonds in the first week of the year, with net purchases of 386.3 bln yen after turning net sellers in the final week of December.
Comments
Comments are closed.