TREASURIES-Slip in Asia, all eyes on jobs data

TOKYO, Feb 5 (Reuters) - U.S. Treasuries slipped in Asia on Friday, cutting some of the big gains made the previous day on fears European debt problems will spread, but losses were limited as many investors kept to the sidelines ahead of a key jobs report.



* A Reuters survey predicted nonfarm payrolls grew 5,000 in January after a surprise 85,000 drop in December, with the market looking at the unemployment rate and possible downward revisions to previous estimates on jobs. Forecasts range widely from a decrease of 97,000 to an increase of 100,000.



* The surge in Treasuries on Thursday also came after data showed that the number of U.S. workers filing for jobless benefits rose unexpectedly last week, sparking concern Friday's reading on payrolls for last month will be worse than expected.



* Yoshio Takahashi, a fixed-income strategist for Barclays Capital in Tokyo, said the jump in Treasuries prices the previous day suggested the market may react more sensitively to a weaker result than a stronger one in the non-farm payrolls report due at 1330 GMT.



* Treasuries were likely to remain strong compared with government bonds in Europe amid worries over the fiscal health of debt-laden euro zone countries like Greece, Spain and Portugal, analysts said.



* The T-note futures edged down 1.5/32 to 118-6.5/32. The benchmark 10-year notes were down 3/32 in price to yield 3.623 percent, up a basis point from late New York trade on Thursday.



* The two-year notes were unchanged in price to yield 0.824 percent, while the 30-year bonds were down 4/32 in price to yield 4.565 percent, up a basis point.



(Editing by Chris Gallagher)

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