TOKYO: US Treasury bond prices inched higher in Asia on Wednesday, as continuing fears about some euro zone countries' ability to service their debt kept demand for fix-income assets firm.

Later Wednesday, the European Commission will set out its economic strategy for the euro zone, balancing growth with austerity steps.

"The market is worried about developments in Europe, which is keeping yields low," said a fixed-income fund manager in Tokyo.

"In the background, there are concerns about the strength of the US economy, and until there are clearer signals from the US Federal Reserve about its monetary steps going forward, demand for Treasuries will be firm," he said.

The yield on Spain's 10-year bonds hit a six-month high of 6.54 percent on Tuesday as Spain said it will soon issue new bonds to fund its efforts to prop up its financial sector and regional economies. That raised worries about whether it will be able to sustain its debt.

Independent rating firm Egan-Jones cut its sovereign rating on Spain deeper into junk territory on Tuesday.

The yields on 10-year notes slipped to 1.72 percent, down from 1.73 percent in late U.S trading on Tuesday and edging close to the September's low of 1.67 percent, which was its lowest level in at least 60 years.

The 30-year bond yield fell to 2.83 percent, from 2.84 percent in late US trade on Tuesday.

Investors will be searching US economic indicators for clues about the economic outlook, to gauge whether the Federal Reserve will extend its bond purchases after its so-called "Operation Twist" stimulus program expires at the end of next month.

The monthly payroll data on Friday is expected to show that employers added 150,000 workers in May, while data on Thursday is expected to show that US gross domestic product grew 2 percent in the first quarter.