TREASURIES-U.S. bond prices steady on bargain-hunting, Fed purchase
* Concerns over a strike on Syria lend support to bond prices
* Fed's Beige Book, Williams, Kocherlakota on tap
* Fed buys $1.47 billion in long-dated Treasuries
NEW YORK, Sept 4 (Reuters) - U.S. government debt prices were little changed to higher on Wednesday, as bargain-minded investors emerged to help stabilize a market that has been on edge over the Federal Reserve's possible decision in two weeks to reduce its bond purchases.
The Treasuries market was also supported by traders seeking to profit from the Fed's latest purchase operation. It bought $1.474 billion of Treasuries that mature in Feb. 2036 through Feb. 2043 as part of its planned $45 billion of Treasury debt purchases in September.
In the absence of market-moving data, some traders dialed on the day's Fed purchase operation which targeted long-dated bond issues. They sought to profit from these issues by reselling them to the central bank.
Treasury yields approached two-year highs on Tuesday on unexpectedly strong factory data that might allow the U.S. central bank to pare its $85 billion of monthly purchases of Treasuries and mortgage-backed securities, known as QE3. The Fed's next policy meeting will be on Sept. 17-18.
Yields were held in check on safe haven bids linked to jitters over a U.S. military strike against Syria for its use of poison gas that U.S. officials say killed 1,429 civilians last month. President Barack Obama won the backing of key federal lawmakers in his call for limited action on Syria. It is unclear when a strike will occur after traders had expected such a move this past weekend.
"People are waiting for what happens with Syria. It might be positive for Treasuries," said Justin Lederer, Treasury strategist with Cantor Fitzgerald in New York.
A survey from J.P. Morgan Securities released on Wednesday showed more investors added longer-dated Treasuries on Tuesday compared to a week earlier. The share of these "long" investors increased from 17 percent to 23 percent, the highest level since July 22, J.P. Morgan said.
Still the marquis event for the bond market this week is the government's payrolls report on Friday. Strong jobs gains would seal expectations the Fed will scale back its bond purchases starting in October, while a weak figure would revive bets the central bank would delay such a move.
Economists polled by Reuters forecast U.S. employers likely added 180,000 jobs in August, leaving the unemployment rate unchanged from July at 7.4 percent, which was the lowest level since December 2008.
Other recent data suggested the U.S. economy, while still growing, has slowed due to sluggish global demand and a spike in mortgage rates.
The government reported the U.S. trade gap grew a tad more than expected in July as exports slipped after contributing to a huge contraction in the deficit the previous month.
Investors will receive anecdotal views on the economy when the Fed releases its Beige Book at 2 p.m. EDT (1800 GMT), two weeks before its next policy meeting.
They will also digest views later Wednesday from two Fed officials, San Francisco Fed President John Williams and Minneapolis Fed chief Narayana Kocherlakota. Neither are voters this year.
On average volume, benchmark 10-year Treasury notes were little changed in price at 96-28/32, yielding 2.861 percent. The 10-year yield was 8 basis points below a 25-month high recorded on Aug. 22, according to Reuters data.
The 30-year bond rose 10/32 in price with a yield of 3.775 percent, down 1.8 basis points from Tuesday's close. The 30-year yield was about 17 basis points below its two-year high set two weeks ago.
While longer-dated debt yields have traded in a volatile manner on worries about less Fed purchases, short to medium term yields have risen to their highest levels in over two years on speculation over the timing of the Fed's first rate increase.
"The market is adjusting to the idea that low rates are not going to be here forever," said Thomas Roth, executive director of U.S. government bond trading at Mitsubishi UFJ Securities USA in New York.
The yield on two-year Treasuries was last 0.438 percent, up 2 basis points from Tuesday's close, while the yield on five-year notes was 1.703 percent, up 2.1 percent from late on Tuesday.