Treasuries Decline After Obama Announces $447 Billion Stimulus

Sept. 9 (Bloomberg) -- Treasuries fell after President Barack Obama called on Congress to pass a jobs plan that would inject $447 billion into the U.S. economy, reducing demand for the safest assets.

The package is heavily geared toward tax cuts, which account for more than half the dollar value of the stimulus. Longer-maturity bonds led losses before the Treasury Department sells $66 billion in three-, 10- and 30-year debt next week.

Obama’s speech “may be a little negative for Treasuries,” said Hiromasa Nakamura, a senior investor at Mizuho Asset Management Co. in Tokyo, which oversees the equivalent of $39 billion and is a unit of Japan’s second-largest bank by assets. “U.S. yields may pick up a little bit, but in the medium term, I forecast yields will decline further.”

Yields on 10-year notes rose three basis points, or 0.03 percentage point, to 2.01 percent at 9:24 a.m. in Tokyo, according to Bloomberg Bond Trader prices. The 2.125 percent securities due in August 2021 fell 9/32, or $2.81 per $1,000 face amount, to 101 1/32. The yield slid to 1.9066 percent on Sept. 6, the lowest on record.

--Editors: Nate Hosoda, Jonathan Annells

To contact the reporters on this story: Candice Zachariahs in Sydney at [email protected]

To contact the editor responsible for this story: Rocky Swift at [email protected]