TOKYO: US Treasuries were firmly supported in Asia on Wednesday, with 10-year yields stuck near a seven-month low as investors look for a safe haven on worries Greece may be inching closer to an eventual exit from the euro zone.
The 10-year notes yield stood at 1.762 percent , compared to 1.770 percent at the end of US trade on Tuesday, when it fell to as low as 1.760 percent, its lowest since early October.
Market players see an increasing chance of a test of last year's low of 1.674 percent, as investors trying to shun euro zone bonds could flock to US Treasuries further.
Greek political leaders will meet on Wednesday to form a caretaker government to lead the country into its second election, likely in mid-June, after the failure of last-ditch negotiations to form a technocrat government.
Opinion polls show that Greek voters enraged with five years of recession might give more seats to leftist parties opposed to the bailout conditions, raising the chance that a new government may back out of bailout commitments and leave the euro zone.
"There's a scarcity of safe assets. Market players are aware of that. That's why yields are falling to record lows in many countries, including Germany, Sweden and Australia," said a foreign bond trader at a Japanese bank.
Given uncertainty over Greece's repeat election, likely in mid-June, US Treasuries are likely to attract safe-haven flows for coming weeks, market players said.
The market is also looking to minutes of the Federal Reserve's April policy meeting due later in the day for any clues on the Fed's internal debate on their policy stance after the current Operation Twist will end in June.
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