US Treasury prices ended little changed on Wednesday but yields hovered near eight-month lows as a sale of new US debt attracted firm demand but fell short of the blow-out sale many dealers were expecting.
The government sold $16 billion in new five-year notes for a high yield of 2.695 percent, which was down from February's 2.84 percent but above the average of 2.36 percent from the previous five auctions.
A surge in US Treasury prices following last Friday's unexpectedly weak February employment report curbed some demand for the new paper, but investors still bid for 2.47 times the amount of notes on offer.
Indirect bidders, which include customers of primary dealers and foreign central banks, snapped up some 44 percent of the sale, beating the 42 percent taken in February.
Heavy interventions in the currency market have left Asian central banks, especially the Bank of Japan, with large amounts of US dollars, which wind up parked in Treasuries. But domestic investors seemed to be active in this month's sale.
"What you have to look at is what has been occurring in the foreign exchange markets.
They (BOJ) were rumoured to be significant buyers on Friday and Monday, the Treasury market was bid up on Friday and Monday, so there's a very big risk that they've already put that money to work," said Barclays Capital debt strategist Gemma Wright.
At the close, five-year notes were down 2/32 in price to yield 2.67 percent, versus 2.66 percent on Tuesday, down from an earlier yield high of 2.69 percent, aided in part by a fall on US stock indexes.
Bond prices have surged since data last week showed job growth in the United States remains sluggish, which means official interest rates are unlikely to rise this year.
The benchmark 10-year Treasury note was down 2/32 in price to yield 3.73 percent, versus 3.72 percent on Tuesday and down from near 4.02 percent before Friday's jobs report.
The 30-year bond was unchanged for a yield of 4.67 percent. Two-year notes were 1/32 lower in price for a yield of 1.51 percent.
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