Treasurys rise after 30-year bond auction

NEW YORK (MarketWatch) � Treasurys rose on Thursday, pushing yields lower, as the Treasury Department sold $16 billion of 30-year bonds at 3.18%, the highest yield at a 30-year auction since April.

Yields on the benchmark 10-year U.S. Treasury note 10_YEAR �fell 5 basis points to 2% following the auction.

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Markets reporter Chris Dieterich outlines the improving jobs picture, as evidence by the most recent numbers of people seeking initial jobless claims.

Yields move inversely to prices and one basis point is one one-hundredth of a percentage point.

Bidders offered to buy 2.74 times the amount of debt sold, more than an average of 2.6 times at the last six sales.

Analysts at Nomura gave the auction an A- rating. �Cupid delivered many [basis points] in the days leading up to the bond auction and all the backend players were indeed smitten,� they wrote in a note.

Indirect bidders, a group that includes foreign central banks, bought 36.3% compared to 36.5% in recent sales. Direct bidders, a group including domestic money managers, purchased another 14.5%, versus an average of 13.9% in the last six sales.

Yields on 30-year bonds 30_YEAR �fell 5 basis points to 3.18%.

�The market is holding on and we�re trying to get a handle on demand and interest around this refunding,� said David Ader, head of government bond strategy at CRT Capital Group.

Anticipation of the 30-year auction muted the reaction to data showing a contraction in Japanese and euro-zone gross domestic product, he said.

�I would have thought that we would have been trading even firmer,� Ader said, referring to higher Treasury prices. �I think the hurdle to that is the auction process.�

Japan�s economy shrank 0.1% in the period from October to December, missing expectations of a 0.1% rise. On annualized basis, Japanese GDP fell 0.4% in the fourth quarter of 2012.

The euro-zone economy contracted 0.6% in the fourth quarter, a bigger decline than the 0.4% expected by analysts. Euro-zone GDP plunge stokes rate-cut expectations

Yields on the five-year note 5_YEAR �fell 2 basis points to 0.884%.

Treasuries didn�t respond much to the sharp decline in weekly U.S. jobless claims, Ader said. Initial jobless claims declined by 27,000 to a seasonally adjusted 341,000 in the week ended Feb. 9. While claims posted a sharp decline, the drop may be attributed in part to the blizzard that hit the Northeast last week. Read: Jobless claims sink 27,000 to 341,000.