TOKYO: US 10-year Treasuries gained in Asian trading on Thursday, after the Federal Reserve reaffirmed its commitment to continue buying bonds and as investors awaited Friday's key US jobs report.
The Fed said on Wednesday that it would keep to its bond purchasing, citing growth risks from recent US government budget tightening and still-high unemployment.
The US central bank currently buys $85 billion of longer dated US Treasuries and mortgage-backed bonds every month.
The non-farm payrolls report for April is scheduled for release on Friday. The median expectation of economists polled by Reuters is that employers added 145,000 jobs last month.
But on Wednesday, an industry report said the pace of US manufacturing growth slowed in April. The Institute for Supply Management said its index of national factory activity fell to 50.7 from 51.3 in March, and its employment index fell to 50.2 from 54.2.
The ADP National Employment Report also released on Wednesday showed the US private sector added 119,000 jobs in April, well below the rise of 150,000 forecast by economists in a Reuters survey..
Some market participants caution of a potential upside surprise in the payrolls report despite Wednesday's downbeat data.
"The payrolls figure could surprise on the upside even after the weak ADP figures -- perhaps not a reading of 300,000, but between 150,000 and 200,000 is possible," said Hiroki Shimazu, senior market economist at SMBC Nikko Securities.
"That would be a clear sell factor" for Treasuries, Shimazu said.
Also underpinning demand for bonds and pressuring equities, the final HSBC Purchasing Managers' Index for April released on Thursday fell to 50.4 from the previous month's 51.6, coming in slightly below the flash reading of 50.5, as new export orders fell.
MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.4 percent.
The yield on US 10-year notes skidded to 1.630 on Thursday from 1.637 percent in late US trading on Wednesday, when it dropped as low as 1.614 percent.
The yield on 30-year bonds fell to 2.830 percent from 2.839 percent in late US trade.
Later on Thursday, the European Central Bank is expected to cut its main interest rate for the first time in 10 months after the recent gloomy economic data.
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