* Treasuries rangebound as data meets expectations
* Tapering in focus for Fed January meeting
* Fed buys $2.81 bln notes due 2022 and 2023
NEW YORK, Jan 17 (Reuters) - U.S. Treasuries prices rose on Friday as economic data was largely as expected and as trading volumes were light before a long holiday weekend. The bonds have held in a relatively tight range this week, after a weaker-than-expected employment report last Friday led benchmark 10-year yields to fall from near the 3 percent level to a range between 2.82 percent and 2.92 percent. Market participants are now focused on whether that report is likely to lead the Federal Reserve to hold its monthly bond purchase program at current levels when it meets later this month, or continue to reduce the size of purchases. "There is still some feeling that they may pause if the economic data looks somewhat weaker, that sentiment surfaced after the employment report but since then we've seen better economic numbers and the beige book released this week was quite upbeat," said Jim Kochan, chief fixed income strategist at Wells Fargo Funds Management in Menomonee Falls, Wisconsin. The U.S. economy continued to grow at a moderate pace from late November through the end of 2013, with some regions expecting a pick-up in growth, the Fed said on Wednesday in its Beige Book report of anecdotal information on business activity collected from contacts nationwide. Strong economic releases since the payrolls report, including better-than-expected retail sales on Tuesday, are seen as supportive of the Fed's plan to continue to pare purchases. "The mix of data that we've seen over the last week, even in light of the disappointing employment report, all suggest that the Fed is going to continue with its tapering schedule and drop another $10 billion at the end of January," said Ian Lyngen, senior government bond strategist at CRT Capital in Stamford, Connecticut. The U.S. central bank cut the size of its monthly bond purchase program by $10 billion to $75 billion at its December meeting. The Fed bought $2.81 billion in notes due 2022 and 2023 on Friday as part of its ongoing purchase program. It will purchase debt next Tuesday through Friday. The market is closed on Monday for the Martin Luther King Day holiday. Benchmark 10-year notes were last up 3/32 in price to yield 2.832 percent, down from 2.845 percent late on Thursday. Bonds showed little reaction to data on Friday that U.S. housing starts fell less than expected in December, and industrial output rose by 0.3 percent in December, as expected.
U.S. consumer sentiment also slipped in its first January measure, weighed by lowered expectations among lower- and middle-income families, a survey showed.
(Editing by Nick Zieminski and Meredith Mazzilli)