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TREASURIES-Bonds firm in Asia despite strong US data

TOKYO, Oct 2 (Reuters) - U.S. Treasuries held firm in Asia on Tuesday, having easily recovered from a dip sparked by strong U.S. manufacturing data the previous day, due to uncertainty over Europe.

* The yield on 10-year notes stood at 1.622 percent , little changed from late U.S. levels on Monday, and not far from three-week low around 1.60 percent hit on Friday.

* The market started the new quarter on a firm note on Monday, having pared earlier losses triggered by strong U.S. manufacturing data.

* The Institute for Supply Management (ISM), an industry group, said its index of U.S. factory activity rose to 51.5 in September as new orders and employment picked up, its first reading above 50 points, which separates expansion and contraction, since May.

* Still unwinding of brokers' hedge selling for new bond issues by General Electric Co on Monday helped to lift the market.

* The market is also supported by uncertainty over Europe. The market has not shown a notable reaction to report that Spain is ready to request a euro zone bailout for its public finances as early as next weekend but Germany has signalled that it should hold off.

* Market players also say bonds look solid also as the Fed keeps buying a sizable amount of bonds from markets through its Operation Twist and the QE3.

(Reporting by Hideyuki Sano; Editing by Kim Coghill)

((hideyuki.sano@thomsonreuters.com)(+81 3 6441 1827)(Reuters Messaging: hideyuki.sano.thomsonreuters.com@reuters.net))

Keywords: MARKETS TREASURIES ASIA/