SINGAPORE, April 19 (Reuters) - U.S. Treasuries rallied

sharply as news reports of explosions in Iran and a possible

Israeli missile strike sent investors scurrying into safe assets

in Friday morning Asia trade.

Benchmark 10-year yields fell more than 10 basis

points to 4.5384%, recouping much of the week's selling.

Two-year yields dropped 9 bps to 4.8985%.

Yields fall when bond prices rise.

Iran's Fars news agency said explosions were heard near the

airport at the country's central Isfahan city. Israeli missiles

hit a site in Iran, ABC News reported, citing a U.S. official.

"It's a haven trade," said Mizuho's chief economist for Asia

outside Japan, Vishnu Varathan in Singapore.

"The Treasury move can also be explained because it's not

just tactical, it's fear and fear tends to have an impact on

growth and demand."

Oil, gold and the dollar rose sharply in other markets and

sovereign bonds around Asia rallied. Ten-year Japanese

government bond yields dropped four bps in their

sharpest fall for the year so far.