Japanese yields have edged lower, with the.....>

JGBS: Japanese yields have edged lower, with the 4-20 Year sector of the curve

outperforming. The bid in Japanese paper came despite the BoJ's decision to

reduce the size of its purchases of JGBs with 3 to 5 years until maturity in

today's Rinban operations to Y300bn from Y330bn previously. Elsewhere, the sizes

of the 1-3 & 10-25+ Year purchases were left unchanged in today's Rinban

operations. Reaction to the change was limited, as it had been telegraphed by

some.

- Looking at the breakdown of the Rinban operations, the 3-5 Year bucket's offer

to cover ratio ticked up to ~3.4 from ~2.9, although it was the 25+ Year

bucket's offer to cover ratio that provided the biggest swing, as it fell to

~3.3 from ~4.2.

- JGB futures finished the morning session higher, after showing little reaction

to the trimming of the Rinban, extending on these gains, in line with Tsys in

afternoon dealing. JGB futures briefly traded above the 100 & 200-DMAs (150.76).