TOKYO May 17 U.S. Treasuries were supported on Friday after a deluge of soft U.S. economic data helped the benchmark yield step away from two-month high hit earlier in the week.
* The yield on 10-year notes stood at 1.876 percent, flat from late U.S. levels but off two-month high of 1.985 percent hit on Wednesday.
* The yield on 10-year notes stood at 1.876 percent, flat from late U.S. levels but off Wednesday's 1.985 percent, the highest level since March 15.
* The yield posted biggest fall in a month on Thursday after a raft of economic data fell short of expectations.
* The number of Americans filing new claims for unemployment insurance benefits last week jumped 32,000 to a seasonally adjusted 360,000, the biggest rise since November.
* Factory activity in the U.S. mid-Atlantic region contracted in May, the Philadelphia Fed said. New orders fell to the lowest level in almost a year.
* A sharp drop in gasoline costs in April led to the biggest drop in U.S. consumer prices in more than four years, with the Consumer Price Index falling 0.4 percent, the biggest decline since December 2008.
* Annual inflation in April was subdued at 1.1 percent, well below the Fed's 2 percent inflation goal. Core inflation, which strips out volatile energy and foods, also posted the smallest annual gain since June 2011, at 1.7 percent.
* Soft data eased expectations that the Federal Reserve may soon start tapering off its bond-buying programme, although some Fed officials on Thursday called for weaning the economy off stimulus.
* Attracting attention in particular, John Williams, president of the Federal Reserve Bank of San Francisco, long seen as a policy dove, said on Thursday the Fed could begin easing up on stimulus this summer and end it late this year.
* While the bond market showed limited reaction to William's comments, bonds could slip further if Fed Chairman Ben Bernanke also signals that winding down bond buying is an option in his coming public appearances.
* Bernanke will speak on long-term economic prospects on Saturday and testify before the congressional Joint Economic Committee on Wednesday.
* "What's becoming clear is even doves at the Fed think recent softness in the economy is temporary. Given the pace of recovery in employment, I think the Fed could start reducing bond buying this year," said Hiroki Shimazu, senior market economist at SMBC Nikko Securities. 4