Futures continue to struggle for...............>

JGBS: Futures continue to struggle for follow-through above yesterday's highs,

finishing the morning session 11 ticks above settlement levels, with the curve

twist flattening.

- Caution re: Coronavirus in the Asia-Pac region has supported prices, while the

latest round of commentary from senior government ministers and BoJ Governor

Kuroda have done little to inspire price action. Most recently, it appears that

Kuroda was questioned in parliament re: a hypothetical wind down of the Bank's

ETF purchases. He answered this as you would expect i.e. to happen when CPI

approaches target and with an eye on market impact.

- CPI data was in line with exp. while flash PMIs were soft across the board.

- The BoJ left the size of its 1-10 Year JGB purchases unchanged in today's

Rinban operations, with spreads tightening and offer/cover ratios moderating.

Breakdown of ops were as follows:

- 1-3 Year: Cover 4.05x (prev. 4.27x), Average Spread -0.006 (prev. 0.003)

- 3-5 Year: Cover 3.02x (prev. 3.27x), Average Spread -0.008 (prev. 0.006)

- 5-10 Year: Cover 2.33x (prev. 3.52x), Average Spread -0.0014 (prev. 0.010)