SINGAPORE, March 19 U.S. 10-year Treasuries
slipped in Asia on Tuesday, but losses were limited as investors
remained concerned about a plan to tax bank deposits in Cyprus
to help pay for the country's bailout.
* Breaking with previous European Union practice that
depositors' savings are sacrosanct, Cyprus and international
lenders agreed at the weekend that savers in the island's
outsized banking system would take a hit in return for an offer
of 10 billion euros ($13 billion) in aid.
Ahead of a parliamentary vote on Tuesday that will either
secure the island's financial rescue or threaten default, euro
zone ministers urged Cyprus to let smaller savers escape the
proposed levy on bank deposits.
Although European officials have said the measure is a
one-off for a country that accounts for just 0.2 percent of
European output, the rescue plan has raised fears that it could
set a precedent for future euro zone bailouts and destabilise
the region's financial system.
* Ten-year Treasuries slipped 1/32 in price to yield roughly
1.958 percent, little changed from late U.S. trade.
The 10-year yield had touched a 1-1/2 week low near 1.90 percent
* "I think there are only negative implications for those
euro zone countries and banks that are considered to be
relatively weak," said Tomohisa Fujiki, interest rate strategist
for BNP Paribas in Tokyo, referring to the bailout plan for
Such concerns may help support Treasuries in the near term,
Other supportive factors for Treasuries include ongoing
worries about political instability in Italy in the wake of last
month's deadlocked election, and concerns about the potential
economic impact of $85 billion in U.S. government spending cuts
that began on March 1, Fujiki added.