TOKYO Jan 4 Benchmark U.S. Treasuries yields
probed fresh eight-month highs in Asia on Friday, after signs of
doubt within the Federal Reserve over its bond-buying program
pressured U.S. debt.
The minutes of the Fed's December policy meeting revealed
that while the central bank appears set to continue buying
bonds, some policymakers are reticent about further increasing
its $2.9 trillion balance sheet.
"The market expected the Fed to buy about half of the new
issuance of Treasuries this year, and the minutes contained
words that made some investors completely rethink their
supply/demand expectations," said Hiroki Shimazu, senior market
economist at SMBC Nikko Securities.
The minutes came a day ahead of the monthly U.S. nonfarm
payrolls report, which is expected to show the economy added
150,000 jobs in December, up from November's 146,000. The U.S.
unemployment rate is expected to stay at 7.7 percent, according
to a Reuters survey of economists.
The ADP Employment Report on Thursday showed private-sector
employers added 215,000 jobs in December, beating the
expectations of economists surveyed by Reuters, who had foreseen
a gain of 133,000 jobs.
"Even if the payrolls data brings a downside surprise, there
has been other evidence of improvement in the U.S. economy, so
yields are unlikely to drop sharply," Shimazu added.
Yields on 10-year Treasuries stood at 1.929
percent in Asian trade on Friday, their highest since May and
above 1.904 percent in late U.S. trade on Thursday
Yields on 30-year Treasuries stood at 3.138
percent, up from 3.118 percent on Thursday.
Treasuries dropped earlier this week after the U.S.
government reached an agreement to avert the "fiscal cliff" of
tax hikes and spending cuts that threatened to tip the economy
back into recession, though the deal covered only taxes and
delayed decisions on expenditures until March 1.
"While the 'fiscal cliff' was averted, the debt limit
problem remains unsolved," said Ayako Sera, market economist at
Sumitomo Trust and Banking.
"This move is so rapid that a correction would not be
unexpected, with people buying back debt," she added.
On the supply side, the Treasury said on Thursday it will
offer $32 billion of three-year notes on Tuesday, $21 billion of
reopened 10-year notes on Wednesday and $13 billion of reopened
30-year bonds on Thursday.