A solid round of 10-Year JGB supply and........>

JGBS: A solid round of 10-Year JGB supply and another uptick in new COVID-19

cases in Tokyo supported JGB futures in afternoon trade, allowing the contract

to to reverse its overnight/morning losses, with the contract printing +3 into

the bell. 10s now outperform on the curve in cash trade (twist flattening seen

on the curve) in the wake of supply, yields are higher further out the curve,

with worries over longer end supply dynamics still evident. A quick refresher on

the auction dynamics: the cover ratio moved higher despite the Y500bn jump in

auction size (although the previous auction's cover gave a pretty low base for

comparison), elsewhere, the low price topped dealer exp., as the width of the

price tail held steady and % allotted at the high yield fell. Whether it was

relative value plays or the carry and roll attractiveness against the rest of

the curve, dealers were seemingly comfortable mopping up the additional supply.

- The latest round of weekly international security flows data showed that

foreign investors shed Japanese bonds at the quickest rate seen since the end of

March, dumping Y1.3939tn worth of paper in the most recent week.

- 1-5 & 10-25 Year BoJ Rinban ops headline locally tomorrow.