Japan returns from an elongated holiday........>

JGBS: Japan returns from an elongated holiday weekend today.

- To recap, JGB futures sold off heavily on Friday as the BOJ trimmed the size

of its 25+-Year Rinban operations by Y10bn, which caught traders off guard. The

second round of sell orders hit in afternoon dealing, pushing the contract down

to levels not seen since the BOJ induced volatility in early August. The move

was aided by strong offer to cover ratios across the longer dated Rinban

operations.

- The curve finished notably steeper on the day, with the 40-Year yields

settling at 1.05%.

- There was also some interest in the JBX8 149.00 puts in early dealing Friday.

- This week's 40-Year supply (due Wednesday) could have created additional

concession in the long end on Friday.

- A speech from BOJ Governor Kuroda, 5-10 Year Rinban operations & the minutes

from the BOJ's July MonPol decision (where it tweaked the YCC) headline today.