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TREASURIES-Bonds gain footing in Asia after fall on profit-taking
March 5, 2013 / 4:45 AM / in 5 years

TREASURIES-Bonds gain footing in Asia after fall on profit-taking

TOKYO, March 5 (Reuters) - Treasuries rose in Asia on Tuesday, following a slip on profit-taking the previous day, due to jitters over political uncertainty in Italy and the pace of growth in the United States.

* The yield on 10-year notes ticked down to 1.872 percent from 1.879 percent in late U.S. trade on Monday, when a late-day rally in Wall Street shares prompted a bit of profit-taking in bonds after the yield hit a five-week low of 1.827 percent earlier in the day.

* Ongoing political turmoil in Italy hampered investor appetite for risk. After February’s inconclusive election, the country could be inching toward another vote within months.

* Investors were also fretting over the pace of growth in the U.S. after automatic government spending cuts, known as “sequestration,” were allowed to kick in starting March 1.

* In addition, Treasuries also drew support from the latest rally in both Japanese and German bond prices. The 10-year JGB yield hit 10-year lows on expectations of more bond buying from the Bank of Japan on Tuesday. German bond yields were near their lowest level this year.

* The 10-year Treasuries yield has been mostly kept in a relatively narrow range between 1.8 to 1.9 percent in the past week as investors hesitated to bid up bonds further as they do not expect a financial crisis of the magnitude of last year’s European debt crisis.

* “Basically bond investors are now served with the same dishes from last year of the Italian bond crisis and U.S. fiscal crisis, which they generally like. But they don’t taste as good as before,” said Arihiro Nagata, foreign bond investment manager at Sumitomo Mitsui Bank.

* Traders say Treasuries could stay range bound as well for much of the week, as markets wait for a European Central Bank meeting on Thursday and key U.S. jobs figures on Friday.

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