TOKYO Nov 14 U.S. Treasuries were firm in Asia
on Wednesday, with the 10-year notes yield staying near
two-month low, on worries about the fiscal cliff and a lack of
consensus among Athen's international lenders on steps to
* The yield on ten-year notes stood at 1.600 percent
, not far from Tuesday's low of 1.5725 percent, which
was its lowest level since early September.
* Treasuries extended gains after last week's re-election of
President Barack Obama on fears Democrats and Republicans could
prolong squabbling over the "fiscal cliff" - the $600 billion in
spending cuts and tax increases set to kick in early next year
that could send the economy back into recession.
* The full cast of lawmakers in the debate gathered in
Washington on Tuesday for the first time since the elections,
setting the stage for a week of trial balloons and rhetorical
repositioning in the race to avoid the cliff.
* Some market players think worries in the market may be
overdone, given that the U.S. economic fundamentals appear to
have been improving in recent months.
* "I expect they will reach a stopgap measure at the very
last minute, as they did at the time of negotiation on debt
ceiling. At the moment, the market is becoming risk-off but I
think the concerns will fade and the Treasury yield could test a
high of 1.80 percent," said a fund manager at a U.S. asset
* Still, others say the risk-off mood in financial markets
is likely to continue for now, as U.S. investors are likely to
sell shares, expecting higher tax rate on dividend and capital
gains next year.
* "The risk at the moment is for yields to fall further.
For, before the election, many investors had been cautious about
Treasuries, preparing for a possible victory of (Republican
challenger Mitt) Romney," said a trader at a Japanese bank.
* Also helping Treasuries, Europe is also still battling to
fix its problems as the euro zone finance ministers and the IMF
fail to agree on a long-term budget goals for Athens and on the
IMF's push for the euro zone to take further losses on Greek