TREASURIES-Fall in Asia, get little reprieve after sell-off

By Masayuki Kitano

TOKYO, May 14 (Reuters) - U.S. Treasuries fell on Wednesday, getting little reprieve after sliding the previous day as solid retail sales data helped underscore expectations that the Federal Reserve would take a pause from lowering interest rates.

Treasuries also fell after various Fed officials on Tuesday expressed concerns about inflation, which will be a focal point later in the day when investors take cues from data on consumer prices for April.

A growing perception that the worst of the credit market turmoil might be over has also helped drag Treasuries lower, said a trader for a European investment bank.

"Things might not be back to normal, but market players seem to think that the worst may be over for financial markets," the trader said.

"Ten-year Treasuries may no longer find support even if yields rise to 4 percent," he said, adding that benchmark 10-year yields could climb towards 4.250 percent if the psychologically key 4 percent level is breached.

Benchmark 10-year Treasury notes fell 4/32 in price to yield 3.928 percent <US10YT=RR>, up 1.5 basis points from late U.S. trading on Tuesday.

The two-year note fell 1/32 in price to yield 2.494 percent <US2YT=RR>, up 2 basis points from late New York.

The 10-year Treasury yield briefly rose to around 3.940 percent earlier on Wednesday as Japanese government bonds fell sharply, with 10-year JGB futures plunging by as much as 1.83 point to a seven-month low of 134.28 2JGBv1. [JP/]  Continued...