TOKYO: US Treasuries edged higher in Asia on Thursday, after a weak Spanish bond sale pressured stocks, revived European debt fears and offset fading expectations of more US monetary stimulus.
Spain's borrowing costs jumped at bond auctions on Wednesday, rekindling concerns about funding difficulties by lower-rated euro zone countries.
The yield on the 10-year notes inched down to 2.22 percent from 2.23 percent in late US trade and 2.28 percent in Asia on Wednesday.
The thirty-year bond yield fell to 3.36 percent from 3.38 percent in US trading, and from 3.41 percent in Asian on Wednesday.
Treasuries marked their biggest sell-off in three weeks on Tuesday, after minutes from the latest US Federal Reserve meeting dashed hopes that further stimulus measures were forthcoming.
"There was a bit overreaction to the FOMC minutes, with no indication at all that the Fed would move the peg," said a trader at a European brokerage in Tokyo. "People who had steepening trades on, they had to take a little of that off."
Still, he said, the medium-term trading outlook is unclear due to economic uncertainties, leading some to question the appeal of US fixed-income assets.
"This is the first time in the last 30 years that 10-year yields are below core inflation, so if you buy 10-year notes, you have effectively locked in a loss for the next 10 years," he added. "Where's the risk-reward there?"
MSCI's broadest index of Asia Pacific shares outside Japan fell 0.5 percent, and Japan's Nikkei average slid 0.9 percent.
On the data front, US private-sector jobs data by payrolls processor ADP showed employers added 209,000 jobs in March, above a 200,000 forecast.
Investors await further confirmation of a strengthening labor market from the nonfarm payrolls report on Friday, which is expected to show an increase of 203,000 jobs last month.
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