TOKYO Feb 25 U.S. Treasuries slipped slightly
in Asian trading on Monday ahead of auctions this week, but
losses were limited as investors awaited testimony from the top
U.S. central banker as well as automatic government spending
cuts scheduled to take effect later this week.
* On the supply side this week, the Treasury Department will
offer $35 billion of two-year notes on Monday,
followed by $35 billion of five-year debt on
Tuesday, and then $29 billion of seven-year notes
* Federal Reserve Chairman Ben Bernanke will testify before
the Senate Banking Committee on Tuesday and the Housing
Financial Services Committee on Wednesday.
Investors will be looking to his remarks for reassurance
that the Fed will continue buying assets to support the economy
and is not leaning toward curbing its easing program later this
year as the economy improves.
* U.S. debt prices were underpinned by concerns about the
impact of automatic U.S. government spending cuts set to begin
on Friday, if Democrats and Republicans fail to agree on how to
avert the so-called "sequester" cuts ahead of the deadline.
Economists said these cuts worth $85 billion would hurt the
economy. Ahead of the deadline, the White House issued more dire
warnings about the harm the cuts will do to Americans, breaking
down the loss of jobs and services to each of the states.
* "It seems we are on course for such cuts to happen," said
Tomohisa Fujiki, interest rate strategist for BNP Paribas in
Tokyo. "So that will be supportive for the Treasuries market."
Still, he said that neither the spending cuts nor Bernanke's
testimony were likely to be the catalyst to nudge U.S debt
yields out of their recent ranges.
* Yields on 10-year Treasuries rose to 1.975
percent in Asian trade on Monday, from 1.964 percent in late
U.S. trade on Friday.
* Yields on 30-year Treasuries crept higher to
3.167 percent, from 3.150 percent on Friday.