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Japanese markets return to the fray today......>

JGBS
JGBS: Japanese markets return to the fray today after a holiday on Friday for
Mountain Day. JGB's saw some selling on Thursday despite the geopolitical
tensions between US and North Korea. Sources note the selling was linked to
liquidation of ASW longs, the short end under some pressure after the weak JGB
T-Bill buyback operation. Geopolitics likely to limit any rise in yields in
JGB's amid thin summer volumes.
- JGB Opening Call Barclays: "Today could see thin trade due to the Obon
holidays, but buyers could take a slight upper hand, especially in the superlong
end, on JPY appreciation after USTs were bought heavily at the end of last week.
We look for the curve to continue flattening. The BoJ does not have any buying
operations scheduled for today. This week's focus will be the 5y JGB auction on
17 August."

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