SINGAPORE: The US 10-year Treasury yield was little changed in Asia on Thursday with market players waiting to see whether euro zone leaders will come up with convincing steps to contain the region's debt crisis at a Friday summit.
Ten-year notes dipped around 2/32 in price to yield 2.042 percent, little changed from late US trade on Wednesday.
European Union leaders will meet for an informal working dinner on Thursday, ahead of their summit meeting on Friday.
Hopes that the summit would lead to a turning point in the euro zone's debt crisis have taken a hit after a senior German official gave a downbeat assessment of prospects for an agreement, in an apparent effort to jolt partners into accepting Berlin's terms.
Another focal point is the European Central Bank's policy decision on Thursday. The ECB is seen likely to cut interest rates by 25 basis points to 1.0 percent, and traders are also looking for hints on whether the central bank is ready to step up its government bond buying programme to stem turmoil in euro zone bond markets.
Overall, euro zone officials seem to be heading in the right direction in their push to contain the region's debt crisis and if this is confirmed at the summit, Treasuries may face selling pressure in the near term, said Shinichiro Kadota, non-yen fixed income strategist for Barclays Capital in Tokyo.
On the other hand, one possible source of support is uncertainty over the fate of a number of US fiscal measures that are due to expire in December.
Treasuries may find support if measures such as jobless benefits are not extended, Kadota said.
"That would pose downside risks to the growth outlook for next year," he said.
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