Early trade Thursday saw JGBs draw support.....>

JGBS: Early trade Thursday saw JGBs draw support from the short Chinese

communique re: U.S. trade matters, with a degree of buy the rumour sell the fact

creeping in. A subsequent move lower in JPY crosses and the Nikkei 225 added

further support to the space in early trade. Futures breached Wednesday's

opening high, before closing the AM session shy of best levels, while shorter

dated paper through to the belly outperformed in cash trade, ahead of 30-Year

supply. 30-Year JGB yields edged lower in the wake of the auction as the cover

ratio edged higher & the tail narrowed vs. the prior auction. Also worth noting

that the low price topped the exp. of the BBG dealer poll. This continued

through the afternoon, with the curve flattening as a result, while futures

stuck to a tight range.

- Little reaction to comments from BoJ Gov. Kuroda, as he made no major

alterations to his assessment of the economy. The market also paid little

attention to the BoJ upgrading its assessment of 2 regions in its latest report.

- Lower tier data today, with focus turning to next week's domestic CPI print,

an address from BoJ's Kuroda & Amamiya & the usual BoJ Rinban ops.