Treasury prices ended narrowly mixed yesterday after the market spent an extremely quiet session watching to see if the weakness in overseas stock markets, especially in Japan, would infect U.S. stock prices.

Late in the afternoon, the 30-year bond was 1/8 point lower and yielded 7.83%.

Treasury prices improved in overseas trading and reached the day's highs early in the New York session after Japanese stocks suffered another big slide overnight in Tokyo.

The Nikkei index of Japanese stocks, which declined 5.7% over the course of last week, dropped another 3.6% overnight.

The index fell 598.65 points, to close at 15,921,22, marking the first time the Nikkei had closed below 16,000 since October 1986.

The Treasury market "had a good bid overnight primarily because the Nikkei fell apart again," said Astrid Adolfson, a financial economist at McCarthy, Crisanti & Maffei Inc.

Some European stock markets also sold off yesterday, and Latin American bourses were hard hit, with Brazilian stocks down 6.7%, Argentine stocks off 6.4%, and the Mexican market down 3.7%.

Market participants wondered if the weakness in other stock markets would trigger selling of U.S. equities, which could in turn trigger a flight-to-quality trade in which investors put their money in short-term Treasuries for safety's sake.

But U.S. stocks managed to hold their ground. After losing 30 points during the morning, the Dow Jones industrial average retraced most of its early decline to close only 4.55 points lower, at 3,280.80.

As U.S. stock prices came off their lows, the Treasury market drifted off its highs.

Traders said, though, that price ranges were narrow and activity was quiet even for a Monday, when trading is usually restrained.

"There was no business to be done and none to be seen," a note trader said.

The absence of any economic indicators may have added to the market's lassitude. This week's economic news does not start until tomorrow, when the May durable goods orders report and mid-June car sales statistics will be released.

Traders expect short-term prices to move lower today in anticipation of this week's supply, although they caution that all bets are off if stock prices get walloped again overnight.

The Treasury will sell $15 billion of two-year notes today and $10.5 billion of five-years tomorrow. Both issues are record sizes.

Late yesterday, the when-issued two-year notes were bid at 5.07%, and the when-issued five-years stood at 6.46%.

A note trader said the two-year yield looked expensive, given that it now seems likely Fed policy will remain steady for the near future.

"We're near the top of our trading range and you would expect some type of concession," the trader added. "If the Street takes the securities at this level, I think they'll have a problem."

Another note trader said a yield in the neighborhood of 5.08% to 5.10% would ensure better distribution of two-year notes, and a coupon trader suggested the notes would come with a 5-1/8% coupon.

But Ms. Adolfson said if stock markets continue to wobble, that could be the factor that guarantees decent auctions.

"If the worrying about stocks continues, it probably means good demand for the twos and fives," she said. "It's not the levels, it's the fear of other instruments. It's just the idea people have no place else to go with their money."

The concern about stock prices led to good bidding at yesterday's weekly bill sale. The Treasury sold $23.4 billion of three- and six-month bills at average rates of 3.67% and 3.77%, respectively.

The September bond futures contract closed unchanged at 100-1/32.

In the cash market, the 30-year 8% bond was 3/32 lower, at 101-24/32-101-28/32, to yield 7.83%.

The 7-1/2% 10-year note rose 1/32. to 101-25/32-101-29/32, to yield 7.22%.

The three-year 5-7/8% note was unchanged, at 100-31/32-101-1/32, to yield 5.48%.

Rates on Treasury bills were mixed, with the three-month bill down one basis point at 3.65%, the six-month bill unchanged at 3.77%, and the year bill down one basis point at 3.98%.

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