TREASURIES-Prices skid in Asia after Fed unveils bond-buy plan

TOKYO Thu Dec 13, 2012 12:32am EST

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TOKYO Dec 13 (Reuters) - U.S. Treasuries fell in Asia on Thursday, pushing up benchmark yields to their highest in a month, after the U.S. Federal Reserve announced a new bond buying programme to stimulate the economy.

* The Fed said it will buy $45 billion in Treasuries each month on top of the $40 billion per month of mortgage-backed bonds it started buying in September. It will expand its purchases to five-year notes from the current seven-, 10- and 30-year Treasuries.

It indicated interest rates would remain near zero until unemployment falls to 6.5 percent.

* With the Fed's policy decision out of the way, investors' attention focused on the stalemate in Washington over how to avert $600 billion worth of tax increases and reduced outlays that would take effect next year.

On Wednesday, Fed Chairman Ben Bernanke warned of damage from the "fiscal cliff" and U.S. House of Representatives Speaker John Boehner said "serious differences" remain with President Barack Obama.

* "An agreement next week would put further upward pressure on yields," said Tomoaki Shishido, fixed income analyst at Nomura Securities.

* Yields on 10-year Treasuries rose to 1.716 percent on Thursday in Asian trade, their highest since early November, compared to 1.685 percent in late U.S. trade on Wednesday.

* Yields on 30-year Treasuries rose to 2.915 percent from 2.880 percent on Wednesday.

* Yields on five-year notes rose to 0.663 from 0.643 percent late Wednesday.

* On the supply side, the Treasury on Thursday will offer $13 billion of 30-year bonds. Next week, it will sell two-, five-and seven-year notes, as well as five-year Treasury inflation-protected securities.

Wednesday's sale of $21 billion of 10-year notes before the Fed's announcement met strong demand, with the notes selling at a high yield of 1.65 percent, around 2 basis points lower than where they were trading before the auction. On Tuesday, the Treasury sold $32 billion of three-year notes.

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