TOKYO: The yield on US 10-year Treasury notes climbed from its lowest level in nearly three months, as wary investors tiptoed back into riskier assets and awaited the sale of 5-year notes after two-year notes sale saw tepid demand.
Ten-year Treasuries edged down 4/32 in price to yield 1.8267 percent. On Monday, the yield hit 1.798 percent, marking its lowest level since October4.
Analysts said that the yield's breach of technical resistance at 1.83 percent may clear the way for a challenge of a more than 70-year low of 1.67 percent set in September.
Treasuries have rallied recently, supported by nervousness over the euro zone's sovereign debt crisis, and as investors move to bolster balance sheets by buying low-risk assets heading into year-end.
Traders said Treasuries are expected to continue to attract demand after European finance ministers failed on Monday to boost resources at the International Monetary Fund by a targeted 200 billion euros, agreeing to a boost of 150 billion euros, leaving doubts about whether the scheme would work.
US Treasuries are expected to shine even brighter in the first quarter of 2012, with the pressure on the euro zone bond market expected to rise. In the 17-nation area some 230 billion euros of bank bonds, up to 300 billion in government bonds, and more than 200 billion euros in collateralised debt are all maturing in that quarter.
The yield on 30-year bonds also recovered, coming off a 2-1/2 month low and climbing back above the crucial 2.8 percent mark to last stand at 2.8054 percent.
Traders said that the lack of strong demand for the two-year notes on Monday may spill over to the sale of $35 billion in five-year notes due at 1800 GMT on Tuesday. The government will also sell $29 billion in seven-year debt on Wednesday.
Treasury Department also holds a weekly sale of 4-week bills at 1630 GMT.
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