* Q2 GDP revision, jobless claims seen giving Fed leeway
* Fed bought $1.566 billion in Treasuries
* Treasury sells $29 bln of 7-year notes at high yield of 2.221 pct
By Luciana Lopez
NEW YORK, Aug 29 (Reuters) - Prices for U.S. Treasuries advanced on Thursday as investors began positioning themselves for the month-end and the long holiday weekend, with underlying worries about a possible military strike against Syria supporting safe-haven purchases.
Treasuries had traded lower in the morning after stronger than expected U.S. economic data, which investors saw as giving the Federal Reserve leeway to begin tapering its massive bond-buying program soon.
But after a sale of seven-year debt in the early afternoon, investors scooped up Treasuries and brought yields back down.
“Once the auction got out of the way we saw some accounts stepping back in, mostly to cover shorts and front-run index buying,” said Kim Rupert, managing director of fixed income analysis at Action Economics in San Francisco.
Investors bought as the last trading day of the month on Friday approached. Portfolios managed against benchmark indexes usually buy longer-dated Treasuries around month-end.
“Then of course there are the ever-present threat of Syrian attacks over the weekend,” said William O‘Donnell, head Treasury strategist at RBS Securities in Stamford, Connecticut.
Worries that Western forces could soon launch a military strike against Syria in response to chemical attack by that nation’s government have fueled safe-haven bids for Treasuries this week.
Because Monday is the U.S. Labor Day holiday, markets will be closed, meaning investors holding large positions will be exposed to extra risk should something happen over the long weekend.
The benchmark 10-year Treasury note rose 6/32 in price to yield 2.745 percent on Thursday, from 2.765 percent late on Wednesday.
The 30-year Treasury bond rose 26/32 in price to yield 3.691 percent on Thursday, from 3.736 percent late on Wednesday.
The Treasury also sold $29 billion of seven-year notes on Thursday at a high yield of 2.221 percent.
Despite a relatively low bid-to-cover ratio of 2.43, direct bidding was strong at 22 percent.
Data on Thursday showed new jobless claims fell last week, and the Commerce Department said the economy grew more quickly in the second quarter than earlier reported - a 2.5 percent pace instead of the 1.7 percent reported previously.
Those numbers could make Federal Reserve policymakers more inclined to pare their $85 billion per month buying in Treasuries and mortgage-backed securities as soon as next month, at their Sept. 17-18 meeting.
The timing of the Fed’s so-called taper has become a central question for markets, with Treasury yields shooting up more than 100 basis points in recent months as analysts have increasingly seen that date approaching.
But with data on the world’s largest economy still often mixed, investors have been reluctant to push yields to much higher levels.
Focus has now shifted to August nonfarm payrolls data, due Sept. 6. Those will be the last nonfarm payrolls released before the Fed’s next meeting.
As part of its ongoing stimulus program, the Fed bought $1.566 billion in bonds maturing from February 15, 2036 to February 15, 2043 on Thursday.