TOKYO: US Treasuries steadied in Asia on Wednesday, after slipping the previous day as worries of a major banking crisis in the euro zone receded and as investors braced for a solid recovery in US employment.
The yield on the 10-year notes was little changed at 1.861 percent. It rose about 3 basis points on Tuesday after hitting a two-month low of 1.823 percent in Asian trade.
Although weak US manufacturing data on Monday helped to drive down the 10-year yield to a two-month low, stable euro zone debt markets boosted investors' risk appetite.
Italian and Spanish bond prices rose as investors scaled back concerns that a draconian international bailout of Cyprus could set off a wider bank run in the euro zone.
Wall Street shares also rallied to record highs, with both the S&P 500 and Dow Jones index closing at record highs, undermining the attraction of Treasuries.
Furthermore, investors are expecting Friday's US jobs data, the most important event of the week, to show payrolls gained a net 200,000 in March, well above its trend since the US economy recovered from the 2008 financial crisis.
Still, Treasuries were underpinned by expectations the Federal Reserve will keep buying bonds for the time being to knock down unemployment further.
"US bond yields also look attractive, comparatively speaking, as yields on Japanese and German bonds are falling sharply," said a trader at a Japanese bank.
The 10-year Japanese government bond yield is flirting with 10-year lows near 0.5 percent on hopes of aggressive monetary easing by the Bank of Japan. German Bunds yield about 1.31 percent, not far from its eight-month low near 1.25 percent hit last week on worries about Cyprus.
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