TOKYO: US Treasuries prices edged up in Asia on Monday on safe-haven buying as investor risk appetite waned in the face of continuing fears about Europe's debt crisis, but gains were limited ahead of this week's new supply and expectations of quarter-end portfolio adjustments.
MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.5 percent, as markets remained unconvinced that a European Union summit on Thursday and Friday this week will make any substantial progress towards resolving the debt situation.
As this week marks the end of the April-June period, some investors are expected to sell to book gains, market participants said.
The Treasury Department will also be offering $35 billion in two-year notes on Tuesday, $35 billion in five-year notes on Wednesday and $29 billion in seven-year notes on Thursday.
"There is some supply coming in this week at a time when some people are going to be looking to sell, not buy, but as long as Europe keeps the 'risk-off' trade alive, then they will find buyers, as they did today," said a fixed-income fund manager at a Japanese asset management firm.
The yield on US 10-year notes fell to 1.65 percent from 1.67 percent in late US trade, but remained above 1.62 percent in Tokyo on Friday.
The yields on 30-year bonds stood at 2.74 percent, down slightly from 2.75 percent in late US trade but above 2.69 percent in Tokyo trade on Friday.
On Friday, the Federal Reserve purchased $1.83 billion in bonds due 2036 to 2042 as part of its "Operation Twist" stimulus programme, under which it sells short-term notes and buys longer-term debt with he aim of pushing down long-term rates.
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