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TREASURIES-U.S. bonds firmer, seen supported by Fed purchases
January 15, 2013 / 4:26 AM / 5 years ago

TREASURIES-U.S. bonds firmer, seen supported by Fed purchases

SINGAPORE, Jan 15 (Reuters) - U.S. 10-year Treasuries inched higher in Asia on Tuesday and were expected to stay supported in the near term by the Federal Reserve’s bond-buying programme.

* Ten-year notes edged up 3/32 in price to yield 1.838 percent, hovering near the previous day’s trough around 1.831 percent, which was the lowest level for the 10-year yield in about 1-1/2 weeks.

* Benchmark 10-year Treasuries had edged higher on Monday, supported by the Fed’s purchase of long-dated bonds. Treasuries also enjoyed an uptick on Monday after Fed Chairman Ben Bernanke offered no hints the central bank will back away from its ultra-loose monetary policy.

* Treasuries may hold firm in the near term, especially since more Fed bond-buying is coming up over the next couple of weeks, said Tomohisa Fujiki, interest rate strategist for BNP Paribas in Tokyo.

“Our view is that the 10-year yield could be headed toward a test of levels around 1.75 percent,” Fujiki said, referring to the short-term outlook for 10-year Treasuries.

* The Fed is currently buying $40 billion in mortgage-backed securities and $45 billion in Treasuries each month in a bid to push down borrowing costs and spark faster growth.

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