TOKYO: US Treasuries stabilised in Asia on Friday after a move by key central banks to quell money market strains prompted unwinding of safe-haven bond buying the previous day, with lingering worries over the economy seen continuing to support the market.
The yield on 10-year T-notes stood at 2.08 percent , little changed from late US levels. On Thursday, the yield rose to around 2.12 percent, its highest in two weeks.
Still, investors expect the market to be supported as they think that the dollar injections proposed by central banks will not on their own be enough to pull the euro zone out of its predicament.
While largely overlooked as the focus of investors was on Europe, a raft of US data added to evidence of a slowing US economy.
New claims for jobless aid rose unexpectedly last week and factory activity along much of the Eastern seaboard contracted early this month.
The data reinforced expectations that the Federal Reserve will next week announce help for the US economy which might include increasing purchases of longer-dated Treasuries and paring the interest rate they pay banks on their excess reserves.
"It's hard to deny that economic data for August has been weak... The market will be supported at least until the Fed's policy meeting next week," said Tomoaki Shishido, analyst at Nomura Securities.
Copyright Reuters, 2011
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