Futures have stuck to a tight range, last at...>

JGBS: Futures have stuck to a tight range, last at 150.90 (+4 ticks), while the

cash curve has flattened in afternoon dealing, as super-long outperformance in

front of tomorrow's 20-Year supply came to the fore, perhaps as a result of the

increased USD hedging costs diverting domestic investors back to JGBs & out of

Tsys.

- The BoJ left the size of the Rinban operations covering the 1-10 Year buckets

unchanged. The offer to cover ratio in the 1-3 Year bucket moderated after the

recent run of upticks. The 3-5 Year bucket's offer to cover ratio also eased,

allowing the spread that the operation was carried out at to moved back into

negative territory i.e. above market pricing. The 5-10 Year bucket's offer to

cover ratio was largely stable, although the average spread moved into positive

territory.

- Swap spreads were mixed vs. JGBs.