TREASURIES-Dip in Asia, key data awaited

* Dip in Asia following Tuesday's surge

* Beige book, payrolls eyed for more signs of economic woe

By Shinichi Saoshiro

TOKYO, Sept 3 (Reuters) - U.S. Treasuries were a touch lower in Asia on Wednesday, with the market taking a breather during a lull between the previous day's rally and key data such as the monthly payrolls report later in the week.

On Tuesday, the benchmark 10-year Treasury note yield hit a three-month low as tumbling oil prices eased inflation worries and the Institute for Supply Management's August survey showed manufacturing activity at a standstill. [ID:nN02395172]

Crude oil prices CLc1 dropped to near $105 per barrel for the first time since April on Tuesday after Hurricane Gustav mostly spared oil and gas installations in the Gulf of Mexico.

Market watchers expect Treasuries to remain firmly underpinned in the medium term due to doubts about the global economy, despite the modest dip in Asia on Wednesday.

"First, Treasuries are buoyed by fundamentals, which is a concern due to the global economic slowdown and the risks it entails," said Minako Iida, a fixed-income strategist at Barclays Capital.

"Second, bonds are supported by a reversal of a recent trend. The dollar is now appreciating while oil is falling," Iida said.

September 10-year futures TYv1 dipped 1.5/32 to 116-5.5/32.

Benchmark 10-year notes US10YT=RR dipped 4/32 in price to yield 3.750 percent US10YT=RR, up about a basis point from late U.S. trade. Two-year notes US2YT=RR edged down 2/32 in price to yield 2.287 percent, up 2 basis points.

The dollar's surge has added to the allure of Treasuries by reducing expectations for future inflation. The dollar index .DXY, a measure of the greenback's strength against a basket of major currencies, climbed to a 10-½ month high on Tuesday.

Market participants are awaiting more crucial data due this week that may give Treasuries a further lift if the reports highlight the economy's struggles.

The Federal Reserve anecdotal beige book report on regional economic conditions is expected to reinforce the view of weak growth. [ID:nN02524731]

Friday's U.S. employment data release is also being eyed for any signs of further labour market deterioration. Economists' median forecast is for non-farm payrolls to decrease by 75,000 in August, marking the eighth straight month of decline. (Editing by Michael Watson)