Futures went into the lunch break at 150.91....>

JGBS: Futures went into the lunch break at 150.91 (+5 ticks), as the cash space

traded a little firmer ex- 3-Year paper which underperformed.

- 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, with the super-long end tightening a tad.

- From a technical perspective JGB futures' 151.06 resistance confirmed

significance with gains defining last week largely negated by the rejection

ahead of this level. Yesterday's close below 150.85 had left the contract

looking week, although buyers stepped in this morning. Bears now look for a

close below 150.70, with various moving averages layered in from 150.78. Bulls

now need a close above 151.06 to confirm a shift in focus to 151.15-21.