Dec. 2 (Bloomberg) -- Treasuries were little changed, interrupting a rally that sent yields to a record low, amid speculation demand for the securities will ebb as rates decline.

Yields on two-, 10- and 30-year debt dropped to levels not seen since the U.S. began regular sales of the securities after Federal Reserve Chairman Ben S. Bernanke said the central bank may purchase Treasuries and target long-term interest rates to combat the deepening recession.

“Day by day, rates are falling,” said Tsutomu Komiya, an investor in Tokyo at Daiwa Asset Management Co., a unit of Japan’s second-largest brokerage, which has the equivalent of $103.9 billion in assets. “Treasuries are becoming less attractive. Corporate bonds and asset backed securities will draw investors.”

The yield on the 10-year note was 2.72 percent as of 9:30 a.m. in Tokyo, close to a record 2.65 percent touched yesterday, according to BGCantor Market Data. The 3.75 percent security maturing in November 2018 traded at a price of 108 29/32.

Futures on the Chicago Board of Trade show 74 percent odds the Fed will lower its 1 percent target rate for overnight bank lending by a half-percentage point on Dec. 16, and a 36 percent chance of a three-quarter-percentage point cut.

To contact the reporter on this story: Wes Goodman in Singapore at wgoodman@bloomberg.net.

Last Updated: December 1, 2008 19:53 EST