TOKYO: US Treasuries inched down in Asia on Thursday on light profit-taking after benchmark yields fall to around seven-month lows, but losses were limited as continued uncertainty about Greece supported safe-haven demand for fixed-income assets.
Greece on Wednesday put a senior judge in charge of an emergency government to lead the nation to its second election in just over a month on June 17. The vote could determine whether Greece remains in the euro.
After the first election, Greek politicians failed to reach a compromise over austerity steps required for it to receive a 130 billion euro rescue deal to avoid defaulting on its debts.
"Until the outcome of the election, no one knows how Greece's situation will be resolved. In the meantime, there is room for slight Treasury market adjustments, though it is hard for prices to move much because of all the uncertainty," said Tomoaki Shishido, fixed income analyst at Nomura Securities.
On Wednesday, the European Central Bank said it had stopped providing liquidity to some Greek banks and moved them to an emergency liquidity assistance programme.
The yield on 10-year notes rose to 1.79 percent, compared to 1.76 percent in late US trade on Wednesday.
The 30-year bond yield edged up to 2.93 percent from 2.90 percent in late US trading on Wednesday.
Stronger equities took away some of bonds' appeal. MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.8 percent on Thursday on short covering.
But underpinning bonds, minutes released on Wednesday from the Federal Open Market Committee's April 24-25 meeting showed several members of the central bank's policy-setting group "indicated that additional monetary policy accommodation could be necessary if the economic recovery lost momentum or the downside risks to the forecast became great enough."
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