NEW YORK (CNNMoney.com) -- Bond prices jumped Tuesday after two government reports reinforced expectations for the Federal Reserve to keep interest rates steady when the central bank's policy-makers meet Wednesday.

The dollar fell versus the euro and the yen.

The 10-year Treasury note climbed 19/32, or $5.93 on a $1,000 note, to yield 4.73 percent, down from 4.81 percent late Monday.

The 30-year bond surged 1-2/32, or $10.63 on a $1,000 bond, to yield 4.85 percent, down from 4.93 percent the previous session. Bond prices and yields move in opposite directions.

The five-year note gained 12/32 to yield 4.68 percent, while the two-year note added four ticks to yield 4.80 percent.

The government said wholesale prices edged up 0.1 percent in August. Economists surveyed by Briefing.com had forecast a gain of 0.2 percent. (Full story)

The core Producer Price Index, a closely watched gauge of inflation that excludes food and energy prices, posted a surprise drop of 0.4 percent, compared to expectations for a 0.2 percent gain.

The mild inflation numbers encouraged bond investors who loathe inflation since it erodes the value of their fixed-rate investments.

Investors also took in a report on housing starts that suggested the real estate market is even weaker than previously thought. Housing starts and building permits both fell more than expected last month.

The government said housing starts fell to an annual pace of 1.67 million, down from 1.77 million rate in July. Economists surveyed by Briefing.com had expected starts to slip to a 1.74 million rate. (Full story)

Both reports reinforced expectations that Fed policy-makers will hold rates steady when they meet Wednesday. While concerns about inflation have been easing, the real estate slowdown has elevated worries about overall economic weakness.

Bonds also got a boost from "safe-haven" buying as investors eyed the coup in Thailand, which led to the biggest drop in three years in the Thai currency, the baht. (Full story).

Even though other markets didn't show a big reaction to the coup, investors were watching closely since the Asian currency crisis in 1997 started with the devaluation of the baht, then grew into an international economic slowdown.

At its last meeting, the Fed, the nation's central bank, left the target for its key short-term interest rate unchanged at 5.25 percent after 17 straight hikes.

In currency trading, the euro bought $1.2677, down from $1.2704 late Monday. The dollar bought ¥117.60, down from ¥117.88 the previous session.

Bond charts

After the pause: The Fed's kindest cut?