TREASURIES-Benchmark bonds inch lower as risk assets rally - Reuters
TOKYO, Sept 14 | Fri Sep 14, 2012 11:05am IST
TOKYO, Sept 14 (Reuters) - U.S. 10-year Treasuries fell slightly in Asia on Friday, as investors shed safe-haven assets following the U.S. Federal Reserve's decision in the previous session to take bold new easing measures.
* The Fed said it will buy $40 billion of mortgage-backed debt each month until the employment outlook substantially improves, as long as inflation stays in check. It extended the period it said it would keep interest rates low through at least mid-2015, from its previous plan through late 2014.
But the central bank's stimulus steps included mortgage-backed security purchases rather than the Treasury buys many had expected, which disappointed some bond market participants.
* The Fed's move boosted risk assets, with MSCI's broadest index of Asia-Pacific shares outside Japan jumping more than 2 percent to four-month highs.
* "Stocks are particularly strong today, which is weighing on bonds, and there is also a continuation of yesterday's U.S. mood," said Hiroki Shimazu, an economist in Tokyo at SMBC Nikko Securities.
"Treasuries fell after yesterday's Fed announcement, although they recovered somewhat. The long end pared losses, but it was still down, and inflation concerns remain," he said.
* The yields on 10-year Treasuries rose to 1.743 percent on Friday, compared with 1.739 percent in U.S. trading the previous day.
* The 30-year bond yield inched up to 2.952 from 2.950 percent in late U.S. trading on Thursday, when they briefly rose above the 3 percent level for the first time in about four months.
* On the supply side on Thursday, the U.S. Treasury Department's sale of $13 billion of 30-year bonds met firm demand.
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