TOKYO: US Treasuries were steady in Asia on Tuesday after posting small losses the previous day on optimism that U.S lawmakers may reach a deal to avert the "fiscal cliff", which threatens to push the US economy into a recession.
Leading US lawmakers expressed confidence on Sunday that they could reach a deal to avert the "fiscal cliff" even as they laid down markers on taxes and spending that may make any agreement more difficult.
The 10-year notes yielded 1.611 percent, almost unchanged from late US levels but off its 2 1/2-month low of 1.556 percent hit on Friday.
Optimism on the budget talk in Washington lifted US shares on Monday, with the S&P 500 index rising 2.0 percent from Friday's four-month low.
The market hardly showed any response to Moody's downgrading of France's triple-A rating. "I don't think that's going to affect U.S markets much," said a trader at a Japanese bank.
The euro dipped about 0.3 percent on the news but US stock futures have shown muted response so far.
The immediate focus is on a speech by Federal Reserve Chairman Ben Bernanke in New York at 1215 local time (1715 GMT). Treasuries have been supported by speculation that the Fed is likely to unveil a new stimulus in December, when its Operation Twist is set to expire.
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