TOKYO Jan 31 U.S. Treasuries firmed in Asia on
Thursday, with the 10-year yield dipping below the 2 percent
mark, after the Federal Reserve stuck to its script that policy
support was needed to bring down unemployment.
* The yield on 10-year notes dipped slightly to 1.985
percent from 1.996 percent in late U.S. trade and
its nine-month high of 2.037 percent hit on Wednesday.
* "There were worries that the Fed may become a bit more
hawkish," said Tomoaki Shishido, fixed income analyst at Nomura
* The Federal Reserve on Wednesday left in place its monthly
$85 billion bond-buying stimulus plan, arguing the support was
needed to lower unemployment even as it indicated a
fourth-quarter stall in U.S. economic growth was likely
* Although no one had expected a radical change in the Fed's
policy stance, some market players had been worried it could
rejig its statement to reflect uneasiness among some Fed board
members about its asset-buying program.
* Also earlier on Wednesday, data showed a surprise
contraction in the U.S. gross domestic product in the fourth
quarter, briefly sending Treasury priced higher.
* But they pared back gains quickly as traders realised that
the contraction was caused by weak government spendings and slow
inventory growth while consumer spending and business investment
were in fact solid.
* The focus is now moving to January payrolls data due on
Friday, as an unexpectedly strong improvement in the job market
could spark speculation that the Fed may wind up its bond buying
programme earlier than expected.
* Analysts polled by Reuters expect U.S. employers added
160,000 new jobs this month, up marginally from 155,000 new
positions added in December. The unemployment rate is expected
to be unchanged from December at 7.8 percent.