Fiscal rumours continue to do the rounds in....>

JGBS: Fiscal rumours continue to do the rounds in Japan, but it was 3rd

consecutive soft 10-Year JGB auction that did damage to JGBs, as the tail

widened, cover ratio hit the lowest levels since 2016 and average price at

auction printed lower than dealer exp. for the low price.

- Futures last -32, operating just off lows as we move towards the Tokyo close,

with 10-Year paper underperforming in cash trade. The next test for duration

comes on Thursday, in the form of a 30-Year JGB auction, while there is a

40-Year auction scheduled for next week.

- On the fiscal front there was talk of a Y25tn fiscal package doing the rounds

via NHK, who suggested that this would include about Y13tn worth of fresh fiscal

spending, and that it could be finalised as soon as Thursday. Elsewhere, PM Abe

noted that the government is in the final stages of putting its package

together.

- Services & composite PMI final readings provide the only (limited) point of

interest on what is a very quiet local docket on Wednesday.