TREASURIES-Steady in Asia, eyes on credit and equities

TOKYO, Dec 26 (Reuters) - U.S. Treasuries were little changed in Asian trading on Wednesday after falling earlier in the week, as stocks rallied on news of Merrill Lynch's capital infusion plan and tempered demand for safe-haven government debt.

Trade resumed after being closed on Tuesday for Christmas.

The benchmark 10-year note edged up 2/32 in price to yield 4.207 percent <US10YT=RR> as of 0233 GMT. The 10-year yield eased slightly from 4.218 percent in late U.S. trading on Monday.

The two-year note retreated slightly ahead of an auction in that maturity later on Wednesday.

The two-year yield edged up to 3.272 percent <US2YT=RR>, up slightly from 3.251 percent in late U.S. trading on Monday.

U.S. equities rallied on Monday after Merrill Lynch said it would boost its capital by raising up to $6.2 billion in a private placement with Singapore's Temasek Holdings and Davis Selected Advisors.

Merrill also said it plans to sell most of its middle-market lending business to General Electric Co's (GE.N: Quote, Profile, Research, Stock Buzz) commercial finance arm to free up $1.3 billion in capital. [ID:nN24311966] (Reporting by Masayuki Kitano)