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(Z1) Off Lows, But Remains Weak


Still Vulnerable


Bullish Price Sequence

JGBS: In a note released on Friday Barclays highlighted that lifers were the
largest buyers of super-long JGBs for a 2nd month after registering record low
net purchases last year & were conspicuously behind in their accumulation of
super-long JGBs, but poured into the market toward the end of the FY amid
sluggish yields on FX-hedged US Tsys. March also brought net purchases from
trust banks, ag. financials & foreigners, who all exceeded their FY17 averages.
- In the LT sector, foreigners logged net purchases covering their shorts on
strengthening exp. for prolonged YCC after net selling Jan on exp. of BoJ
normalisation. City banks logged a large net purchase, buying back heavily after
Feb selling, presumably to offset losses on Japanese equities & foreign bonds.
Meanwhile, regional banks were net sellers, seemingly to offset losses on
Japanese equities & foreign bonds.
- In the short/medium sector, foreigners were the biggest buyers, broadly in
line with their FY17 avg. Trust banks were net buyers as surplus funds subject
to -ve spreads came into the market when short/medium-term JGB yield levels
adjusted in mid-March. City banks were net sellers for the 1st month in 4.
MNI London Bureau | +44 0203-865-3809 |
MNI London Bureau | +44 0203-865-3809 |