Treasuries
Up as Growth Falls Short Part Two
Fri January 30, 2004
10:56 AM ET
(Page 2 of 2) THANKS, BOJ
On the margins, the market
was supported by the prospect that foreign central banks' appetite for U.S. debt
remains insatiable. Japan spent a record 7.1545 trillion yen in currency intervention
in January -- equivalent to $67.56 billion at Friday's rate -- to stem the yen's
rise against the dollar, Finance Ministry data showed. Much of that money is thought
to end up in Treasuries. Asian central banks, particularly the Bank of Japan,
have propped up the bond market as massive buyers of Treasuries in the past year
in their fight to slow export-damaging gains in their currencies. Such buying
has helped hold down Treasury yields, compensating for softer demand for U.S.
government bonds from domestic investors. The trend continued in the latest
week, with holdings of U.S. debt by foreign central banks leaping again to touch
a record high. While the gains in that period were mostly concentrated in agency
debt, solid offshore demand for new two-year notes on Thursday comforted U.S.
bond investors, suggesting another uptick in foreign Treasury holdings in the
coming week. | 
