By Wes Goodman March 10 (Bloomberg) -- Treasury 10-year notes may lose appeal as yields decline toward 3.62 percent, according to Daiwa Asset Management Co., citing trading patterns. A Fibonacci graph shows the level is a 61.8 percent retracement of an increase in yields that started Nov. 27 and ended Dec. 31. Using the Fibonacci sequence of numbers, a failure to push through one of the levels suggests the decline is ending. Treasury 10-year yields, a benchmark for company and consumer borrowing costs, were 3.70 percent as of 1:17 p.m. in Tokyo, according to data compiled by Bloomberg. They have fallen from 3.91 percent at the end of last year. “The Fibonacci technical point is strong resistance,” said Tsutomu Komiya, who handles U.S. government debt in Tokyo at Daiwa, which has $77 billion in assets. The company is part of Daiwa Securities Group Inc., Japan’s second-biggest investment bank following Nomura Holdings Inc. The next Fibonacci level after 3.62 percent is 3.53 percent. Ten-year yields approached that level once this year and then rose in the following days. Fibonacci analysis is based on a formula developed by 13th century mathematician Leonardo da Pisa, known as Fibonacci, who discovered the sequence while studying the reproduction rate of rabbits. Analysts use the indicator to determine levels where buy and sell orders may be clustered. In technical analysis, investors and analysts study charts of trading patterns and prices to forecast changes in a security, commodity, currency or index. To contact the reporter on this story: Wes Goodman in Singapore at wgoodman@bloomberg.net.

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