153.00 capped JGB futures in the Tokyo.........>

JGBS: 153.00 capped JGB futures in the Tokyo morning, with the contract back

from best levels last, but still 35 ticks or so higher on the day, while the

Nikkei 225 trades 2.6% lower, after shedding 3.6% in early trade as Japanese

markets played catch up after the holiday. The afternoon session was relatively

subdued.

- A Nikkei report suggesting that the BoJ is considering cutting its inflation

outlook at its Jan MonPol decision also added further support.

- Worth highlighting the meeting between Japan's MoF, the BoJ & FSA officials,

with the usual rhetoric employed by the MoF i.e. will take appropriate steps re:

FX if needed.

- Curve continues to flatten, with 10-Year JGB yields at -0.036% last, off of

lows, but still printing at levels not seen since November 2016.

- BoJ left the size of its 5-10 Year Rinban operations unchanged today. Offer to

cover ratio 2.37x (prev 1.77x).

- Swaps through to 10-Years have widened vs. JGBs, longer dated swaps tightened.

- Focus next week will fall on Rinban ops, as well as 10- & 30-Year supply.