TREASURIES-Drift sideways before 10-year auction

TOKYO, Feb 10 (Reuters) - U.S. Treasuries moved narrowly in Asian trade on Wednesday as investors braced for a $25 billion auction of 10-year bonds, after a three-year note sale posted lukewarm results the previous day.



* Traders were keeping an eye on a potential rescue for debt-laden Greece, as speculation that it would be aided by euro zone countries has tempered demand for Treasuries somewhat. This sentiment has clouded the outlook for safe-haven assets such as Treasuries and weakened the results of Tuesday's $40 billion three-year debt auction.



* The financial woes of Greece and other euro-zone members are likely to dominate a European Union summit on Thursday and investors are looking to what might come out of the gathering to help those countries.



* 'The impact from the EU summit will depend on the details of an expected rescue plan for Greece. But even a better-than-expected rescue plan would have a limited impact as the fundamental problems for Greece will unlikely be solved in the short term,' said a fixed-income strategist at a European securities firm in Tokyo.



* Federal Reserve Chairman Ben Bernanke is expected to outline the U.S. central bank's strategy for tightening monetary policy once it is confident in the strength of the economic recovery. The Fed chairman's prepared testimony will be released at 1500 GMT, even though the congressional hearing where he was due to testify has been postponed due to a snow storm.



* The benchmark 10-year notes edged up 1/32 in price to yield 3.635 percent, down about 1 basis point from late U.S. trading on Tuesday. T-note futures were little changed at 118-7.5/32.



* The two-year notes barely budged in price to yield 0.823 percent. The 30-year bonds were steady in price to yield 4.576 percent.



(Reporting by Kaori Kaneko; Editing by Chris Gallagher)

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