TREASURIES-Rise in Asia, focus on equities and data

By Masayuki Kitano

TOKYO, May 12 (Reuters) - U.S. Treasuries edged higher in Asian trading on Monday as concerns about fallout from credit market turmoil triggered buying of "safe haven" Treasuries.

Treasuries had edged higher on Friday, drawing support from news late on Thursday that American International Group, the world's largest insurer, posted a record $7.8 billion quarterly loss.

But while concerns about financial institutions' losses from the credit market turmoil may linger, such worries may not be enough to send Treasuries sharply higher, said Hiroki Shimazu, a market economist for Mizuho Securities.

Treasuries are likely to trade near recent ranges over the next few weeks, taking their cue from moves in share prices and forthcoming economic data, Shimazu said.

"Some traders say a phase of temporary optimism is drawing to a close, but others say an improvement from the pessimism seen in March remains in place," Shimazu said, referring to market views on the fallout from credit market turmoil.

"Unlike the situation back in March, it's not as if views among market players are tilted overwhelmingly in one direction," Shimazu said. Until the end of May, yields on benchmark 10-year notes seem likely to hover near a range seen over the past month of roughly between 3.7 and 3.95 percent, Shimazu said.

Benchmark 10-year Treasury notes rose 4/32 in price to yield 3.762 percent US10YT=RR, down about 2 basis points from late U.S. trading on Friday. The two-year note was steady in price with a yield of 2.239 percent US2YT=RR.

Treasuries will take their cue this week from a slew of economic data including April retail sales on Tuesday. Other data due this week includes the consumer price index and housing starts as well as a reading on consumer confidence.

The U.S. economy is likely to be supported by the government's economic stimulus measures and the Federal Reserve's monetary easing since last year, said Shimazu at Mizuho Securities. Millions of Americans are receiving tax rebates under a $152 billion economic stimulus package passed by Congress earlier this year and signed into law by President George W. Bush.

A preliminary reading on consumer confidence in May from the Reuters/University of Michigan Surveys of Consumers due on Friday could provide early hints on how the tax rebates might impact consumer spending, Shimazu said. (Editing by Michael Watson)