By Rika Otsuka

TOKYO, Nov 7 (Reuters) - U.S. Treasuries edged up in Asia, supported by a steep fall in regional shares and expectations that a monthly employment report will give a bleak picture of the world's biggest economy later in the day.
The market is expecting a 10th straight monthly contraction in employment in October, another sign the U.S. economy is heading into a long and deep recession. The data is due at 1330 GMT.
Many economists now believe that a decline in the job number could be even larger than the consensus forecast of a 200,000 fall, after data showed October's private sector job losses at their highest in six years and the number of new weekly jobless claims stuck at high levels.
"Results of today's monthly employment report are likely to push down Treasury yields," said Hideki Hayashi, chief economist at Shinko Securities.
"There are few factors that would lead us to believe the report could be better than the consensus forecast. The number of job losses could reach 250,000," Hayashi said.
Goldman Sachs revised down its estimate to losses of 300,000.
Gains in Treasuries were limited, however, as investors remained wary of an expected flood of debt supply next week.
The Treasury plans to sell a total of $55 billion of 3-year and 10-year notes and reopened 30-year bonds next week to meet its quarterly refunding needs. The amount far exceeds the $18 billion refunding in November of last year.
December 10-year Treasury futures rose 6/32 to 115-20.5/32.
The benchmark 10-year note rose 3/32 in price to yield 3.68 percent, down 1 basis point from late New York.
The Nikkei share average was down 4.4 percent by midday. S&P 500 index futures slipped 0.3 percent.
The two-year note was unchanged in price to yield 1.27 percent, after slipping near 1.25 percent the previous day, almost matching a five-year lows reached in March.
Investors have been betting the Federal Reserve will lower interest rates again by the year end to prevent the financial crisis from damaging the economy further.
U.S. short-term interest rate futures are fully pricing in a a quarter-point rate cut from the Fed in December, to 0.75 precent.
Last week, the Fed cut rates by 50 basis points to 1.0 percent.
(Editing by Edwina Gibbs)

((rika.otsuka@thomsonreuters.com; +81-3-6441-1874; Reuters Messaging: rika.otsuka.reuters.com@reuters.net))
Reuters Terminal users can see related news and rates by double-clicking on the following:
Reuters U.S. Treasury and money market rates.....
Reuters U.S. interest-rate swap benchmark........
TradeWeb main guide.............................
Garban ICAP Treasuries data.................
Cantor Fitzgerald Treasuries data...........
Dollar money market speed guide....................
For swaps data....................................
For worldwide Treasuries reports.....................
For Tokyo U.S. Treasuries report....................
For daily Treasuries outlook........................
For Federal Reserve news...........................
For Federal Reserve polls..........................
For other U.S. fixed-income news................
For real-time economic indicators...................
Keywords: MARKETS TREASURIES ASIA

(Multimedia versions of Reuters Top News are now available for: * 3000 Xtra : visit http://topnews.session.rservices.com * BridgeStation: view story .134 * Reuters Plus: from your WebDSS screen For more information on Top News, visit http://topnews.reuters.com)

COPYRIGHT

Copyright Thomson Reuters 2008. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.