TOKYO: US Treasury bond prices were steady in Asia on Tuesday, with investors waiting to gauge US market reaction to the latest developments in Europe's debt crisis.
US markets were closed Monday for the Memorial Day holiday, and so have not yet reacted to Spain's worsening debt situation.
Spanish 10-year bond yields jumped to 6.53 percent, their highest since November 2011, which pushed the yield premium over German Bunds to 515 basis points, its widest in the euro's 13-year history.
Spain appeared ready to use more public debt to recapitalise its banks, which could make its refinancing efforts even more challenging.
"Yields can go either way in US trade, but the risk-off trend still remains because of Spain, so I think we'll see some lower yields in the US as well," said a fixed-income fund manager in Tokyo.
"The 10-year yield is so low already, but we have to position for even lower yields to come. And even if they stabilize, higher yields aren't coming soon," he added.
The yields on 10-year notes stood at 1.75 percent, steady with their levels in late U.S trading on Friday and not far from the 1.67 percent level reached in September, which was the lowest in at least 60 years.
The 30-year bond yield was at 2.84 percent, matching its level in late US trade on Friday.
Looking ahead this week, investors await US economic data, including the key monthly payroll data on Friday that is expected to show that employers added 150,000 workers in May.
Data on Thursday is expected to show that US gross domestic product grew 2 percent in the first quarter.
Any sign that the economy is weakening would be bullish for Treasuries, as it would increase the chances that the Federal Reserve will announce new bond purchases.
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