Treasury Notes Rise Before Fed Purchases as Japan Rating Cut

Treasury two-year notes rose, pushing yields down from a three-week high, as the Federal Reserve prepared to buy debt after saying it intended to stick to its plan to purchase $600 billion of securities by June 30.

The notes also advanced as Japan’s sovereign credit rating was downgraded one step to AA- by Standard and Poor’s. The U.S. expansion is continuing at a pace that’s been “insufficient to bring about a significant improvement in labor market conditions,” the Federal Open Market Committee said after a two-day meeting in Washington yesterday. The U.S. government is scheduled to sell $29 billion of seven-year debt today, the last of three note auctions this week.