YOUR FRIENDS' ACTIVITY

    TREASURIES OUTLOOK-Prices slide on fears of tapering Fed purchases

    RELATED QUOTES

    SymbolPriceChange
    ^DJI15,354.40121.18

    * Some U.S. central bankers eye tapering bond buying-Fed minutes * Chinese data, stock gains lessen safe-haven bids for bonds * U.S. Treasury to sell $21 billion 10-year notes * BOJ's Kuroda sees no additional stimulus, leaves door open By Richard Leong NEW YORK, April 10 (Reuters) - U.S. Treasuries prices sank on Wednesday after minutes from the Federal Reserve's March policy meeting fueled fears the U.S. central bank might slow or stop buying bonds by year-end. The minutes of the central bank's meeting, released earlier than originally scheduled, showed that a few policymakers expected to slow the pace of asset purchases, currently at $85 billion a month, by mid-year and end them later this year. Several others expected to slow the pace a bit later and halt the quantitative easing program by year-end. Stronger-than-expected Chinese import data and record highs in U.S. stock indices also reduced the safe-haven appeal of Treasuries, sending longer-dated yields back to last Thursday's levels. The market sell-off picked up speed after the Treasury sold $21 billion worth of 10-year notes at a high yield of 1.795 percent, slightly higher than the market expected. But some analysts said the reaction to the Fed minutes was overdone as jobs data since the March 19-20 meeting, including March payrolls data released last Friday, have disappointed, stoking expectations for slower growth and continued Fed support. "The payroll jobs report was the final nail in the coffin of an early halt to QE (quantitative easing) for now," said Chris Rupkey, chief financial economist at Bank of Tokyo/Mitsubishi UFJ in New York. Benchmark 10-year Treasuries notes last traded 16/32 lower in price, yielding 1.807 percent compared with 1.752 percent late on Tuesday. The 10-year yield moved further above its 200-day moving average and the level before the release of the March payroll report that showed a paltry gain of 88,000 jobs. The 30-year bond was down 1-12/32 in price for a yield of 3.005 percent, up from 2.938 percent late on Tuesday. On Wall Street, the Standard & Poor's 500 stock index and the Dow Jones (DJI: ^DJI - news) industrial average both closed at record highs. BOJ UNDERPINS BOND SUPPORT Declines were limited by bets Japanese investors will pour money into U.S. Treasuries due to the Bank of Japan's bold $1.4 trillion asset purchase program to stimulate the economy. BOJ Governor Haruhiko Kuroda said there would be no additional stimulus in the coming months but signaled the central bank was open to doing more to achieve faster growth. The BOJ program was the initial catalyst for last week's Treasuries rally as traders bet Japanese banks, insurers and pension banks will increase their purchases of Treasuries and other higher-yielding foreign bonds. But so far, there has been no surge in inflows of Japanese money into the Treasuries market, including in Wednesday's auction of 10-year notes. "We were surprised by the overall lack of strength for the auction, as we expected Japanese investors to show up and grab duration in light of the recent BOJ QE," the Nomura U.S. rates strategy team wrote in a note to clients. "However, we understand that flows might not come immediately, and it takes time for investors to get squeezed out." The Treasury Department will complete this week's debt sale with a $13 billion offering of 30-year bonds on Thursday. Investors digested the latest Federal Open Market Committee minutes much earlier than expected. The U.S. central bank released the record of the March 19-20 meeting of its policy-setting FOMC at 9 a.m. (1300 GMT) rather than the scheduled time of 2 p.m. (1800 GMT). The Fed said it had inadvertently given the minutes to congressional aides and trade groups on Tuesday. It is unclear whether there was unusual trading after those individuals received the minutes. "I won't discount anything," said Robbert Van Batenburg, director of Newedge USA LLC in New York. "You don't expect the Fed to make this clumsy mistake." The Fed said it launched an investigation of the early release of the minutes, which it said appeared to have been "entirely accidental." (Additional reporting by Ellen Freilich and Luciana Lopez; Editing by Kenneth Barry, Dan Grebler and Chizu Nomiyama)