TREASURIES-Losses trimmed in Asia after sell-off
TOKYO, Jan 25 (Reuters) - U.S. 10-year Treasury notes edged higher in Asian trading on Friday, regaining ground after tumbling the previous day, when a stock market rise tempered demand for safe-haven government debt.
Ten-year Treasuries trimmed losses after tumbling on Thursday in their biggest sell-off in nearly four years. Treasuries had fallen as U.S. shares rose, cheered by a deal for tax rebates to stimulate the U.S. economy.
"The pessimism that had taken hold recently was overdone, but it's not as if everything is all fine," said Hiroki Shimazu, a market economist for Mizuho Securities.
"It's not surprising to see buybacks in bonds, including some profit-taking," Shimazu said.
Worries about financial institutions' losses from the credit market turmoil caused by defaults in U.S. subprime mortgages could come to the fore again, especially ahead of earnings announcements by European banks next month, Shimazu said.
Ten-year notes edged up 8/32 in price to yield 3.681 percent US10YT=RR as of 0228 GMT compared to 3.711 percent in late U.S. trading on Thursday.
Two-year notes were steady with a yield of 2.318 percent US2YT=RR.
Some of the more bearish views of the stock market were tempered on Thursday after a single rogue trader was blamed for a multibillion-euro loss at French bank Societe Generale (SOGN.PA). The trader scandal removed some of the worries that the recent stock market rout was because the economy was deteriorating rapidly.
The implied chances for a 50 basis point rate cut at the Federal Open Market Committee's Jan. 29-30 meeting stood at 64 percent FEDWATCH, after being fully priced in earlier in the week.
