TOKYO: US Treasuries edged up in Asia on Monday with the ebbing of optimism among market players on a restructuring deal for Greek debt after the lack of agreement in last week's negotiations.
US bond yields had risen on Friday on views that Greece and its creditors could soon reach agreement on the country's debt restructuring. But negotiators for private creditors said they could not improve their offer.
The focus has now shifted to euro zone finance ministers who will decide on Monday what terms they are ready to accept in a Greek debt restructuring as part of a second bailout package for Athens.
Ten-year US notes yield fell to 2.010 percent, down slightly from 2.025 percent in late US trade on Friday. The yield rose as high as 2.035 percent on Friday, its highest in two weeks.
The market could be capped, however, at least in the next few days ahead of auctions from Tuesday as well as the Fed's first policy-setting meeting of this year on Wednesday.
The Treasury will sell a total of $99 billion in new two-, five- and seven-year notes this week.
A report in Friday's Wall Street Journal that Fed officials are awaiting further economic data before deciding whether to launch a new quantitative easing programme was also seen weighing on bond sentiment ahead of Wednesday's highly anticipated meeting.
The Fed is expected to push out expectations on when it will next raise interest rates until at least 2014, and the meeting will also be closely watched for any hints of new QE, which analysts expect would focus on mortgage-backed bonds.
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