Business & Finance

US 10-year notes edge lower, eyes on Greece

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Ten-year Treasuries slipped 3/32 in price to yield 1.983 percent, up about 1 basis point from late US trade on Wednesday. The 10-year yield has been stuck in a range of roughly between 1.9 percent to 2.08 percent over the past month.

Asian shares rose broadly, with MSCI's index of Asia-Pacific shares outside Japan climbing 1.2 percent.

Major banks and pension funds threw their weight behind Greece's bond swap offer to private creditors on Wednesday, making it increasingly likely that the deal will pass and clear the way for a bailout package to avert an immediate default on its debt.

Optimism that the debt swap would go ahead was weighing on Treasuries, but their losses were limited due to lingering uncertainty and on caution ahead of US jobs data on Friday, said Tomohisa Fujiki, interest rate strategist for BNP Paribas Securities in Tokyo.

"A mild pull-back is taking place ahead of these two major risk events," Fujiki said.

Japanese Finance Ministry data on monthly capital flows released on Thursday showed that Japanese investors bought a net 2.6 trillion yen in foreign bonds in February, close to January's 2.7 trillion yen, which was the largest amount in four months.

Japanese banks may have stepped up their buying of short- and medium-term Treasuries in February after yields in those sectors rose, said a portfolio manager for a major Japanese bank.

Such buying of foreign bonds by Japanese banks is typically conducted without taking on foreign exchange risks, market players say.

Copyright Reuters, 2012