TREASURIES-Bonds rally on safety-bid and dovish Fed

Benchmark 10-year Treasuries made their sharpest rally in more than a month at the open in Tokyo on Tuesday on a combination of dovish Federal Reserve remarks and demand for safe assets following violence in the Middle East. Cash Treasury markets had been closed for a holiday on Monday, so Tuesday morning was traders' first chance to react to Palestinian militants' surprise attack on Israel as well as Fed officials' overnight comments. Fed Vice Chair Philip Jefferson and Dallas Fed president Lorie Logan both noted on Monday that the recent run-up in yields may reduce the need for further interest rate hikes.