TREASURIES-Up in Asia but gains limited before Fed

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TOKYO, March 15 | Mon Mar 15, 2010 12:59am EDT

TOKYO, March 15 (Reuters) - U.S. Treasuries edged up in Asia on Monday as softer regional stocks buoyed demand for government debt, but gains were limited as investors kept to the sidelines before a Federal Reserve meeting the following day.

* The Fed is expected to keep interest rate steady near zero, repeating its vow of an "extended period" of low rates at its meeting on Tuesday. [ID:nN10148647].

* "Since the Fed is likely to end its purchases of long-term securities as scheduled this month, the central bank probably doesn't want to make any other changes which might cause turbulence in the market," said a trader at a Japanese securities firm. "Also U.S. economic figures are still patchy. So the Fed is unlikely to alter its stance on policy this week," he said.

* T-note futures were up 4/32 at 116-29.5/32 TYv1. Benchmark 10-year notes inched up 2/32 in price to yield 3.695 percent US10YT=RR, down about one basis point from late U.S. trade on Friday.

* Two-year Treasury notes US2YT=RR were steady in price to yield 0.952 percent.

* Tokyo's Nikkei average .N225 slipped 0.2 percent and MSCI's broad measure of Asian stocks outside Japan fell 0.9 percent .MIAPJ0000PUS.

* Greece's fiscal woes have at times caused strong safe-haven flows into Treasuries. Although worries about the country have eased, the market will look to the outcome of the Eurogroup finance ministers' meeting on the Greek debt crisis on Monday. [ID:nLDE62D0C2]

* Japan Post Bank bought about 300 billion yen ($3.3 billion) in U.S. Treasuries in October-December, the first time it has purchased U.S. government debt since the start of its privatisation process in October 2007, the Nikkei business daily reported on Monday. [ID:nTOE62E02M] But the market showed subdued reaction to the report as there had been speculation about it at the time, analysts said. (Reporting by Kaori Kaneko; Editing by Chris Gallagher)

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