TOKYO: US Treasury bond prices edged higher in Asia on Thursday, pushing 10-year yields deeper into levels not seen in at least 60 years, as rising European borrowing costs spurred investors to seek safe-haven fixed income assets.
The yields on 10-year notes slipped to 1.615 percent, down from 1.619 percent in late U.S trading on Wednesday, and falling as low as 1.595 percent in early Asian trade. These levels have not been seen in at least 60 years, based on monthly figures tracked by Reuters.
The 30-year bond yield fell to 2.713 percent, the lowest since October 2011, from 2.721 percent in late US trade on Wednesday.
On Wednesday, Spanish 10-year yields rose above 6.7 percent, nearing the 7 percent level viewed as unsustainable, while yields on all tenors of German bonds dropped to record lows.
"Buying is cautious because any good news from Europe could bring US yields off these lows," said a fixed-income fund manager at a bank in Tokyo.
"But today is the last trading day of the month, so investors who must buy to extend the duration of their portfolios are forced to do so, even with yields at these historically low levels," he said.
Slumping equities markets also added to the appeal of bonds. MSCI's broadest index of Asia-Pacific shares outside Japan fell 1.4 percent.
The US economy has taken a backseat to Europe's debt crisis, but investors still await key employment data on Friday for the latest signal on labor conditions.
A poor reading would further underpin bonds, as it would make it more likely that Federal Reserve will extend its bond purchases after its "Operation Twist" stimulus program expires at the end of June.
The non-farm payroll report is expected to show that employers added 150,000 workers in May, up from 115,000 in April.
Later Thursday, a separate report is expected to show that US gross domestic product grew 2 percent in the first quarter.
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