TREASURIES-Yields rise as traders await Yellen testimony

* Yellen testifies to lawmakers on Tuesday and Wednesday

* Economic data this week includes inflation, retail sales

* Weaker yen seen adding to pressure on bonds

By Karen Brettell

NEW YORK, Feb 13 (Reuters) - U.S. Treasury yields rose on

Monday as investors looked ahead to testimony by Federal Reserve

Chair Janet Yellen on Tuesday and Wednesday and waited on a busy

week of economic data.

Investors will be watching for any new indications of when

the U.S. central bank will next raise rates when Yellen gives

her semiannual Humphrey Hawkins testimony before lawmakers in

Washington.

Investors reduced expectations of rate hike at the Fed’s

March meeting after jobs data for January showed disappointing

wage growth.

However, “if she says something hawkish, there’s definitely

a reason to believe they could go in March,” said Justin

Lederer, an interest rate strategist at Cantor Fitzgerald in New (KOSDAQ: 160550.KQ - news)

York.

Benchmark 10-year notes were last down 9/32 in

price to yield 2.44 percent, up from 2.41 percent late on

Friday.

Futures traders are currently pricing in an 18-percent

likelihood of a March rate hike, according to the CME Group (Kuala Lumpur: 7018.KL - news) ’s

FedWatch Tool.

Fed Vice Chair Stanley Fischer said on Saturday (Shenzhen: 002291.SZ - news) that there

was significant uncertainty about U.S. fiscal policy under the

Trump administration, but the Fed would be strict in meeting

targets of creating full employment and getting inflation to 2

percent.

A weaker yen was also seen as putting pressure on bonds on

Monday.

The yen weakened to a two-week low against the U.S. dollar

after a two-day U.S.-Japan summit held over the weekend

apparently ended smoothly without President Donald Trump talking

tough on trade, currency or security issues.

Rising stock markets also reduced demand for the yen and

U.S. bonds, which are typically seen as safe-haven assets.

“The yen is probably putting a little pressure on the

market,” said Lederer, “it’s been a highly correlated trade over

the last few weeks.”

Economic releases including inflation, manufacturing and

retail sales data are also in focus this week.

(Editing by Nick Zieminski)

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