TOKYO: US Treasuries edged higher in Asia on Thursday, bolstered by continued bargain hunting after last week's sharp drop on an improving US economy, and as bearish Chinese manufacturing figures underpinned demand for safe-haven fixed income assets.
The yield on 10-year Treasury notes fell to 2.28 percent from 2.30 percent in late US trading on Wednesday.
But it has remained above its 200-day moving average, now at 2.22 percent, since breaking above it last week, when it added more than 25 basis points. Whenever a break of a key technical level is sustained, this could signal a new trend, some technical analysts say.
The yield on 30-year Treasury notes slipped to 3.37 percent from 3.39 percent in late US trading, nosing underneath its 200-day moving average which it has been straddling, which now stands at 3.38 percent.
China's manufacturing sector activity shrank in March for a fifth successive month, the HSBC flash purchasing managers index showed, with the overall rate of contraction accelerating and new orders sinking to a four-month low.
"The China data wasn't good news, but it wasn't completely unexpected because global economic indicators have been uneven. The important question is the strength of the US economic recovery, and how long the Fed will keep its easy policy," said a market participant at a Japanese trust bank.
Adding fuel to the overnight bargain-hunting rise, US home sales data disappointed on Wednesday.
The National Association of Realtors said existing home sales slipped 0.9 percent to an annual rate of 4.59 million units in February, confounding economists' consensus expectation that sales would rise to a 4.62 million-unit sales pace last month.
The Federal Reserve on Wednesday bought $4.025 billion of Treasuries maturing April 2018 through February 2020 as part of its "Operation Twist" stimulus program.
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