TREASURIES-Futures fall in Asia as stocks gain
TOKYO, March 15 (Reuters) - U.S. Treasury note futures fell in Asia on Thursday as investors took cues from rebounds in stock markets in the region, as well as overnight gains on Wall Street.
U.S. Treasuries have been boosted as concerns over the woes in the U.S. subprime mortgage loan market prompted investors to take money from equities to put into into safer assets like government bonds.
But Treasuries dropped the previous session as U.S. stocks turned higher on bargain hunting.
Tokyo's Nikkei share average .N225 climbed 1.5 percent on Thursday. It logged the second-largest percentage losses for this year in the previous session.
Both Seoul's benchmark Korea Composite Stock Price Index KS11> and China's Shanghai Composite Index .SSEC rose over 1 percent on Thursday.
"Given a rise in Japanese stocks today, U.S. stocks are likely to extend gains, while Treasuries may see more correction," said Yasutoshi Nagai, a senior economist at Daiwa Securities SMBC.
Treasuries were expected to remain under a strong influence from global equities markets and developments on the subprime issue, while investors would also pay attention to a batch of economic indicators due later in the session, Nagai said.
February's reading of producer price data is due at 1230 GMT. Economists forecast a median 0.5 percent increase compared with a 0.6 percent drop in January. Excluding volatile food and energy items, PPI is expected to rise 0.2 percent, the same as January.
Analysts said bigger-than-expected price rises could strengthen concerns that firming inflation pressures would give the Federal Reserve less room to cut rates to support slowing economic growth.
But some said impact from the PPI may be limited as investors were likely to await the key consumer prices report on Friday before actively taking new positions.
Other data due on Thursday includes The Federal Reserve Bank of New York's manufacturing survey at 1230 GMT and the Philadelphia Fed's business activity index at 1600 GMT.
June T-bill futures TYM7 fell 4.5/32 to 108-25/32.
The yield on the benchmark 10-year Treasury US10YT=RR was at 4.542 percent, barely budged from late U.S. trade.
The two-year yield was at 4.581 percent, slightly up from 4.573 percent in late New York Trade.
The spread between two- and 10-year yields was minus 4 basis points in Asia.
