China's CIC says U.S. Treasuries safe for now, but prices high

HONG KONG (Reuters) - U.S. government bonds are a safe investment, but a rise in bond prices has created uncertainties, the chairman of China's sovereign wealth fund said on Monday.

Lou Jiwei, chairman of the China Investment Corp. (CIC) CIC.UL made the comment at the Asia Financial Forum in Hong Kong, adding CIC's strategy will be "to invest in some U.S. Treasury bonds and add more of other assets" to reduce the uncertainty in the fund's portfolio caused by the bonds.

After hitting a record low below 1.40 percent in July 2012, benchmark 10-year U.S. Treasury yields have risen in recent weeks as investors worried about U.S. fiscal issues. In about a month, yields rose up by nearly 30 basis points to 1.86 percent Analysts say investors could be wary of staking out positions until a lasting resolution on budget worries in Washington.

(Reporting by Alison Lui; Writing by Elzio Barreto; Editing by Ken Wills)