Bonds News

TREASURIES-Fall in Asia after 4-day rise, Fed eyed

* Treasuries take breather after a 4-day rise

* Investors avoid big bets before FOMC next week

* Stocks and CPI data eyed

TOKYO, June 17 (Reuters) - U.S. Treasuries fell on Wednesday as investors took profits from a four-day rise and avoided adding positions ahead of a Federal Reserve policy meeting next week.

The benchmark 10-year yield had fallen near 3.65 percent on Tuesday, after climbing as high as 4 percent last week, helped by weaker data on manufacturing and industrial output which in part caused a two-day stock slide this week.

Still, price falls were limited as investors continued to unwind trades made on economic recovery hopes and sold stocks and commodities, and shifted some funds back into safe-haven debt.

Prospects of further Fed purchases later in the day after the central bank bought $6.45 billion of Treasury debt on Tuesday also provided some support to the debt market.

But investors were unsure about the direction for Treasuries once profit-taking runs its course, as views remain that the economy has seen the worst of the recession and before hearing the Fed’s stance on bond buying at its two-day meeting next week after a spike in long-term yields this month.

“Reading ahead what the Fed will do or not do on bond buying this time is very hard,” said Yoshio Takahashi, a fixed-income strategist at Barclays Capital in Tokyo, adding that this uncertainty was keeping market players from making big bets this week.

The 10-year notes fell 7/32 in price to yield 3.689 percent US10YT=RR, up about 3 basis points from late New York trade on Tuesday.

The two-year notes dipped 1/32 in price to yield 1.209 percent US2YT=RR, up about 2 basis points. The 30-year bonds fell 8/32 in price to yield 4.494 percent, up 2 basis points.

U.S. stock futures SPc1 fell more than 1 percent, pointing to a lower start in New York later in the day after Wall Street shares slipped on Tuesday for a second day.

Treasuries’ near-term direction was seen dependent on the stock market as well as a report on consumer prices for May.

On Wednesday, the Fed is expected to buy government bonds with maturities of seven years to 10 years. Fed Chairman Ben Bernanke will speak about community development financial institutions at 1300 GMT, though his remarks are not expected to have an impact on the market. (Editing by Chris Gallagher)