TOKYO: Benchmark US Treasuries steadied in Asia on Wednesday after falling in the previous session as investors bet that upbeat US retail sales data could delay stimulus steps by the US Federal Reserve.
Hope remains alive that the central bank could eventually embark upon more actions to bolster the economy, such as a third round of quantitative easing through bond purchases, or QE3.
But some bet those steps could come later -- or not at all -- after US retail sales rose 0.8 percent in July, beating a consensus estimate for a 0.3 percent gain.
Separate data showed that US producer prices rose last month at their fastest pace in five months.
Later on Wednesday, US consumer inflation figures are expected to show price pressure remains benign, while industrial production is forecast to pick up pace.
Yields on 10-year Treasuries inched down to 1.725 percent from 1.727 percent in late US trading on Tuesday, moving back toward their record low of 1.38 percent hit less than a month ago, on July 25.
Trading activity was relatively thin due to the summer holiday season, and bargain hunters will likely limit any losses, market participants said.
"Benchmark yields won't manage to get to 2.0 percent anytime soon, and will likely top out between 1.85 and 1.9 percent. Buying would emerge if they rise as high as 1.75 percent," said Akihiro Nagata, head of foreign bond trading at Sumitomo Mitsui Banking Co in Tokyo.
Yields on 30-year Treasuries rose to 2.827 percent, slightly above 2.824 percent in late US trading on Tuesday.
The Fed on Tuesday bought $4.65 billion in notes due between 2020 and 2022 as part of its "Operation Twist" stimulus programme, under which it sells short-term notes and buys longer-term debt with the aim of pushing down long-term rates.
Comments
Comments are closed for this article.