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TREASURIES-Extend slide in Asia on rate rise remarks

Wed Jul 23, 2008 12:05am EDT
 
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* Extend fall on Fed official's rate hike comments

* Asian stock rise hurts JGBs, pressuring Treasuries

* Caution before hefty 2-year note sale

By Satomi Noguchi

TOKYO, July 23 (Reuters) - U.S. Treasuries fell in Asia on Wednesday, extending their slide from the previous day when a Federal Reserve official suggested interest rates might have to rise even before labour and financial markets recover.

Philadelphia Fed President Charles Plosser, one of the Fed's most aggressive inflation hawks, said on Tuesday that keeping monetary policy too loose for too long could worsen inflation problems. [ID:nN22196417]

That came after Minneapolis Fed President Gary Stern said on Friday that the Fed cannot wait until financial and housing markets stabilise before raising interest rates.

Regional stock markets got a lift from further declines in oil prices CLc1 and dented Japanese government bonds, which put some pressure on Treasuries.

Caution before a record $31 billion two-year note auction later in the day, which will be followed by more supply with a $21 billion five-year note sale on Thursday, also dented Treasuries, analysts said.  Continued...

 

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