Treasuries Advance as Stock Losses Increase Demand for Safety

Jan. 12 (Bloomberg) -- Treasuries rose, sending 10-year notes to their biggest gain in a week, as declines in Asian stocks and the euro increased demand for the relative safety of government debt.

U.S. securities climbed as traders added to bets the Federal Reserve will keep borrowing costs at a record low. Stock losses raised speculation that the global economic expansion will be uneven this year following 2009’s recession.

“The economy doesn’t have enough power to lead the Fed to raise rates in 2010,” said Kei Katayama, who oversees $1.6 billion of non-yen debt in Tokyo as leader of the foreign fixed- income group at Daiwa SB Investments Ltd., a unit of Japan’s second-biggest investment bank. “I may buy as the yield rises.”

Ten-year note yields declined 2 basis points to 3.80 percent as of 10:32 a.m. in Tokyo, according to BGCantor Market data. The 3.375 percent security due in November 2019 rose 5/32, or $1.56 per $1,000 face amount, to 96 18/32.