Treasuries stayed lower after falling yesterday as investors prepared for a two-day Federal Reserve meeting and a $21 billion auction of 10-year notes. The Fed will probably announce a third round of bond purchases known as quantitative easing tomorrow, according to almost two-thirds of economists in a Bloomberg News survey, while extending its zero-interest-rate policy into 2015. China’s Premier Wen Jiabao said his nation has room for fiscal and monetary measures to support growth and will meet this year’s economic goals. The comments helped spur gains in Asian stocks. “If the Fed is going to implement QE, equity prices could go higher and put some inflationary pressure on Treasuries,� said Tomohisa Fujiki, an interest-rate strategist in Tokyo at BNP Paribas SA, whose New York arm is one of the 21 primary dealers obliged to bid at U.S. debt auctions. Benchmark 10-year yields increased one basis point, or 0.01 percentage point, to 1.71 percent as of 7:11 a.m. in London, according to Bloomberg Bond Trader data. The price of the 1.625 percent security due in August 2022 declined 2/32, or 63 cents per $1,000 face amount, to 99 7/32. The rate compares with the average of 3.72 percent for the past decade. Japan’s 10-year yield rose 1 1/2 basis points to 0.81 percent. The average since September 2002 is 1.34 percent. The MSCI Asia Pacific Index of stocks rallied 1.1 percent, gaining for a fifth day. China’s Wen, speaking yesterday in Tianjin, said a stabilization fund of 100 billion yuan ($15.8 billion) is available for “preemptive� measures. Comparative Returns Investors in U.S. government securities have earned 2 percent in 2012 as of yesterday, according to Bank of America Merrill Lynch indexes. The MSCI All-Country World Index (MXWD) of shares returned 13 percent, including reinvested dividends, data compiled by Bloomberg show. Fed Chairman Ben S. Bernanke and his colleagues will once again roll out unconventional policies to bolster economic growth of less than 2 percent in the second quarter and bring down unemployment stuck above 8 percent for 43 straight months, the Bloomberg survey showed. The Fed has already purchased $2.3 trillion of Treasury and mortgage-related debt to cap interest rates. It’s now in the process of swapping shorter-term Treasuries in its holdings with those due in 6 to 30 years to put downward pressure on long-term borrowing costs. The central bank is scheduled to sell as much as $8 billion of securities maturing from April 2014 to November 2014 today as part of the program, according to the website of the Fed Bank of New York. Inflation Outlook The difference between yields on 10-year notes and same- maturity Treasury Inflation Protected Securities, a gauge of trader expectations for consumer prices over the life of the debt, was 2.39 percentage points, the most since March based on closing levels. The average over the past decade is 2.16 percentage points. Fed debt purchases may help Treasuries by pushing yields down, said Hans Goetti, the Singapore-based chief investment officer for Asia at Finaport Investment Intelligence, which manages the equivalent of $1.44 billion. “Any temporary weakness in Treasuries is a buying opportunity,� Goetti said. “Long-term rates will not go up.� The 10-year securities scheduled for sale today yielded 1.72 percent in pre-auction trading, compared with 1.68 percent at the prior auction on Aug. 8. Investors bid for 2.49 times the amount of debt offered last month, the least in three years. A $32 billion three-year sale yesterday drew purchase orders for 3.94 times the securities available, the highest level on record. The government is also scheduled to sell $13 billion of 30- year bonds tomorrow. To contact the reporter on this story: Wes Goodman in Singapore at wgoodman@bloomberg.net; Sharon Chen in Singapore at schen462@bloomberg.net. To contact the editor responsible for this story: Rocky Swift at rswift5@bloomberg.net.

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