TREASURIES-Yields fall, tracking Japanese govt bonds, after BoJ decision

NEW YORK, Jan 23 (Reuters) - U.S. Treasury debt yields slid on Tuesday, in line with declines in Japanese government bond yields, after the Bank of Japan kept interest rate targets unchanged and its top official quashed speculation of a move away from an easy monetary policy. Benchmark U.S. 10-year yields, which move inversely to prices, fell for the first time in five days, while those on 30-year bonds sank to a one-week low. In Japan, the cash 10-year Japanese government bond yield dipped to 0.070 percent, slipping further from a six-month high of 0.090 percent set last week. JGB yields fells after BoJ Governor Haruhiko Kuroda said he saw no immediate need to raise interest rates or slow the bank's regular purchases of exchange-traded funds - one of its stimulus measures - despite criticism the buying was artificially inflating Tokyo stock prices. "This rally in Treasury prices is coming from overseas, especially the comments from the BoJ that they will keep policy accommodative," said Subadra Rajappa, head of U.S. rates strategy at Societe Generale in New York. In mid-morning trading, U.S. 10-year Treasury note yields fell to 2.620 percent, from 2.663 percent late on Monday. U.S. 30-year bond yields, meanwhile, hit a one-week low of dropped to a one-week low of 2.879 percent an was last at 2.884 percent, down from Monay's 2.927 percent. U.S. 2-year note yields were also down, trading at 2.052 percent. Societe's Rajappa said the central banks are in focus this week with the recently concluded BoJ meeting, and the upcoming policy decisions of the European Central Bank later this week, as well as the Federal Reserve next week. The Fed is not expected to raise interest rates next week, as investors priced in a rate hike in March. The market though was more focused on the ECB. "Both the ECB and the BoJ are stuck between a rock and a hard place," said Rajappa "If they sound too hawkish, then their currencies start to appreciate and it kind of hurts their ability to make progress on the inflation front." When central banks push back from their initial hawkish rhetoric, then the market starts stabilizing, causing a rally in prices such as what has been happening on Tuesday, she added. Also later on Tuesday, the U.S. Treasury auctions $26-billion in 2-year notes.

January 23 Tuesday 10:19AM New York / 1519 GMT Price

US T BONDS MAR8 149-15/32 0-25/32 10YR TNotes MAR8 122-108/256 0-84/256 Price Current Net Yield % Change


Three-month bills 1.4275 1.4526 -0.005 Six-month bills 1.6025 1.638 -0.010 Two-year note 99-168/256 2.0569 -0.016 Three-year note 99-120/256 2.1853 -0.025 Five-year note 98-158/256 2.4239 -0.037 Seven-year note 98-24/256 2.5516 -0.041 10-year note 96-208/256 2.6205 -0.043 30-year bond 97-72/256 2.8865 -0.041


Last (bps) Net

Change (bps)

U.S. 2-year dollar swap 19.75 -0.25


U.S. 3-year dollar swap 19.00 -0.50


U.S. 5-year dollar swap 7.00 0.00


U.S. 10-year dollar swap 3.25 -1.00


U.S. 30-year dollar swap -12.50 -1.00


(Reporting by Gertrude Chavez-Dreyfuss; Editing by Bernadette Baum)