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TREASURIES-Bonds regain some ground as Fed decision awaited
September 13, 2012 / 6:16 AM / 5 years ago

TREASURIES-Bonds regain some ground as Fed decision awaited

TOKYO, Sept 13 (Reuters) - U.S. 10-year Treasuries regained ground in Asia on Thursday, with yields coming off a three-week high hit overnight, as investors awaited the conclusion of a Federal Reserve meeting where the central bank could announce stimulus steps.

* The Fed could embark on a third round of quantitative easing, known as QE3. It might also opt to extend the period for which it has committed to keep rates near zero, which now goes through late 2014.

A Reuters poll showed economists raised their bets on QE3 to 65 percent from 60 percent in August.

* "Once the way is clear for progress on Europe's debt situation, the market's attention can turn back to the U.S. economy. Last week's bad jobs data made the Fed more likely to act, but people need to be careful, because the Fed could hold off until its next meeting or even later," said a fixed-income fund manager at a European asset management firm in Tokyo.

* Bonds dropped on Wednesday as investors shed safe-haven assets for riskier ones, in the wake of a German ruling that cleared the way for that country to ratify Europe's new bailout fund.

* Worse-than-expected results at a $21 billion U.S. 10-year note sale on Wednesday also weighed on debt prices overnight. The reopening of the 10-year issue sold in August garnered a yield of 1.764 percent, about 1 basis point above what market participants had expected.

* The yields on 10-year Treasuries slipped to 1.747 percent on Thursday from 1.758 percent in U.S. trading the previous day.

* The 30-year bond yield fell to 2.912 from 2.917 percent in late U.S. trading on Wednesday.

* On the supply side, the U.S. Treasury Department will hold a $13 billion auction of a 30-year bond at 1 p.m. (1700 GMT) on Thursday, which will coincide with several Fed events.

The Fed will release its policy statement at 12:30 p.m. (1630 GMT), followed by its latest economic forecasts at 2 p.m.(1800 GMT). Fed Chairman Ben Bernanke will hold a press conference at 2:15 p.m. (1815 GMT).

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