TREASURIES-Rise in Asia after sell-off, BOJ

TOKYO, Aug 30 (BestGrowthStock) – U.S. Treasuries rose in Asia on
Monday as persistent concerns about the economy prompted players
to hunt for bargains after a sharp sell-off late last week, when
Federal Reserve Chairman Ben Bernanke signalled no new bond
buying by the Fed was imminent.

* Treasury buying picked up pace after the Bank of Japan
decided to expand its fund supply tool at an emergency meeting on
Monday, saving more aggressive steps for when there is clearer
evidence of a slowdown in a fragile Japanese economy hit by a
strong yen. [ID:nTOE67S01V]

* “As the BOJ emergency meeting has moved out of the way,
bulls have started to take fresh long positions in Treasuries,”
said a senior trader at a big Japanese bank. “Today’s rise shows
many players bet the rally in Treasuries on the back of
double-dip recession fears has not yet run its course.”

* U.S. Treasuries posted their biggest one-day sell-off in
three months on profit-taking on Friday after Bernanke did not
show a firm commitment for additional easing, though he did say
the economic recovery has weakened more than expected and the Fed
stands ready to act if needed to spur slowing growth.
[ID:nN27258237]

* Weak economic data and hopes that Bernanke would specify
some new steps to further relax monetary policy had boosted
Treasuries before Bernanke’s speech at the Fed’s annual
conference in Jackson Hole, Wyoming, on Friday.

* Benchmark 10-year Treasury notes rose 6/32 in price to
yield 2.623 percent (US10YT=RR: ), down 2.5 basis points from late
U.S. trade on Friday. The 10-year yield hit a 19-month low of
2.42 percent last week.

* The two-year yield stood at 0.536 percent (US2YT=RR: ), down
2 basis points on the day.

* Thirty-year notes gained 4/32 in price to yield 3.683
percent (US30YT=RR: ), down 1.5 basis points on the day. The
30-year yield rose as far as 3.730 percent prior to the BOJ
policy announcement.

* The two-year/30-year yield spread was 315 basis points,
having widened from a 16-month low of 299 basis points hit last
week.

* Now that Bernanke’s speech at annual conference has passed,
investors will look to a series of economic data due later in the
week, including the government’s monthly employment report on
Friday, for further evidence that the economic recovery is losing
momentum, traders said. [ECI/US]

* Data released late last week showed the U.S. economic
recovery was weaker than originally estimated in the second
quarter, though the headline growth figure came in a little less
dire than some had expected. [ID:nN26193565].
(Reporting by Rika Otsuka; Editing by Chris Gallagher)

TREASURIES-Rise in Asia after sell-off, BOJ