A fairly uneventful session for JGB's,.........>

JGBS: A fairly uneventful session for JGB's, despite the geopolitical events

over the weekend. JGB futures moved higher in the overnight session on Monday in

response to the news that North Korea had conducted a hydrogen bomb test, th

move was mostly pared by the Tokyo open. At the open in Tokyo JGB futures gapped

higher, jumping to session highs of 151.31 before retracing the opening gap and

seeing rangebound trade for the rest of the session, last up 2 ticks at 151.24.

- Japanese monetary base data was ignored, the end of period figure rose 16.3%

on the year against 15.6% expected, the nominal figure rising to Y469.2tln.

- The BoJ bought JGB's in the <1 Year, 10-25 Year and 25+ Year zones, all sizes

were kept unchanged and the operations were taken down smoothly, bid/covers rose

in all maturities which put downard pressure on JGB's.

- JGB's head into the close broadly unchanged, 10-Year yield last up 0.1bp at

-0.002%, on Friday the yield hit the lowest since November at -0.005%.

-  The initial flight to safety on North Korea looks overdone, but there seems

to be a lack of confidence around Japan sovereign debt, Japanese 10-Year

sovereign CDS's have risen 6.8bp in the last month.