The longest decline in Treasuries this year has left U.S. government debt the cheapest since March 2011 when measured by real yields and the best relative value compared with German bunds in more than two decades.
The yen fell beyond 101 per dollar for the first time since April 2009 after a government report showed Japanese investors boosted holdings of overseas bonds and investors speculated on improving prospects of the U.S. economy.
Treasury 30-year bonds fell, pushing yileds to almost a one-month high, after the dollar strengthened beyond 100 per yen for the first time in four years, damping demand for U.S. government securities.
The Federal Reserve is likely to announce next week a round of asset purchases focused on mortgages to bolster President Barack Obama’s efforts to help debt-strapped homeowners refinance, Toronto-Dominion Bank’s Richard Gilhooly said.
Treasury 30-year bond yields fell the most since 2010 after President Barack Obama endorsed a deficit-cutting proposal by a bipartisan group of senators that would end a stalemate on the U.S. debt ceiling.