TREASURIES-Inch up in Asia as oil, stocks eyed

* Treasuries edge up in Asia after holiday

* Market seeks direction from oil prices, stocks

* G8 comments on oil, dollar eyed

By Chikako Mogi

TOKYO, July 7 (Reuters) - U.S. Treasuries edged up in Asia on Monday after a three-day weekend in the United States, as players sought direction from stocks and oil prices and awaited comments from the leaders of the Group of Eight rich nations.

The Treasuries market was closed on Friday for the Independence Day holiday.

The yield curve will likely stick to a steepening trend as oil prices scale record highs and as share prices slump on worries about slowing U.S. growth and more credit writedowns from financial institutions, analysts said.

Data that landed before the holiday showed a sixth straight month of job losses in June and a bigger-than-expected drop in the Institute for Supply Management's service-sector index, paring expectations for the Federal Reserve to raise interest rates anytime soon.

The Fed, however, will have to address the risk of inflation running out of control at some point, making longer-dated bonds vulnerable to selling pressure. At the same time, views that interest rates will eventually rise make two-year bonds less appealing even if a rate hike is not imminent, analysts said.

While jobless claims shot to a level tied to past recessions, the ISM's service-sector report showed inflation pressures soaring to a record high for the survey's 11-year history.

"In the near-term, bonds may be bought on worries about earnings or writedowns and stock weakness, but over the longer term, there are factors pointing to selling pressure," said Yoshio Takahashi, a fixed income strategist at Barclays Capital Japan.

The Fed's inability to raise rates in the near-term despite rising inflation could undermine the dollar, and might also raise doubts about the central bank's credibility, he said.

An oversupply in broader bond markets could also weigh on Treasuries, he said, as companies and other institutions take advantage of low interest rates to raise funds by issuing bonds.

The benchmark 10-year Treasury note US10YT=RR was yielding 3.958 percent, down about 2 basis points from 3.98 percent in U.S. trade on Thursday.

The two-year note US2YT=RR yielded 2.517 percent, also down about 2 basis points from 2.54 percent on Thursday.

The market was watching a three-day meeting of G8 countries in Hokkaido, northern Japan, starting on Monday for whether the leaders would deliver a convincing message to stem the rise in oil prices and help support the dollar, traders said.