TREASURIES-Edge higher in Asia after weak U.S. data

TOKYO, Dec 28 (Reuters) - U.S. 10-year Treasury notes edged higher on Friday, supported by the previous day's weak economic data and jitters about financial firms' losses from credit market turmoil.

U.S. equities fell and Treasuries rose on Thursday after a Goldman Sachs analyst said in a report that Citigroup, Merrill Lynch and JPMorgan Chase may write off more than $33 billion of debt in the fourth quarter. [ID:nN27302523]

In addition, Treasuries drew strength from data showing a smaller-than-expected gain in U.S. durable goods orders last month and a surprising weekly uptick in first-time filings for jobless benefits. [ID:nN27394856]

The rise in jobless claims was particularly positive for Treasuries, said Yasutoshi Nagai, chief economist for Daiwa Securities SMBC's economic research group.

"This raises the possibility that the December employment numbers could come in pretty weak," Nagai said, adding that he had revised down his forecast for payrolls data because of the rise in jobless claims. Nagai said he expected non-farm payrolls to rise by 50,000 in December, compared to his previous forecast for an increase of around 120,000 jobs.

U.S. jobs data for December will be released next Friday. Benchmark 10-year Treasuries rose 2.5/32 in price to yield 4.193 percent US10YT=RR by 0431 GMT, down from 4.203 percent in late U.S. trading on Thursday.

Two-year yields dipped to 3.209 percent US2YT=RR from 3.218 percent late in New York.

While worries about geopolitical risks were lending support to Treasuries after Pakistani opposition leader Benazir Bhutto was assassinated on Thursday, market players said Treasuries were feeling more impact from weak economic data.

Besides moves in share prices, Treasuries are likely to take cues later on Friday from data on U.S. new home sales and a reading on Midwest manufacturing to be released by the the National Association of Purchasing Management-Chicago. (Reporting by Masayuki Kitano; Editing by Rodney Joyce)