JGB futures finished the morning session 7.....>

JGBS: JGB futures finished the morning session 7 ticks lower at 150.95, as the

BoJ reduced the size of its purchases in the 25 Year+ bucket in its Rinban

operations. The sizes of the purchases in the other buckets were left unchanged.

- The latest move from the BoJ could suggest that the yield curve is too flat

for its liking. As a reminder back in January the BoJ reduced the size of its

10-25+ Year buckets, but stepped up the purchases of the 3-5 Year sector later

in the month in an attempt to steepen the curve. Focus will now fall on the

BoJ's March bond buying plan, due for release this evening.

- Daiwa were not surprised by the move after super-long yields had softened

heading in to the FY end in Mar.

- Some investment houses pushed their expectations for BoJ normalisation further

in to the future this week, with NBC financial noting that only foreign

speculators are viewing these BoJ moves as a catalyst for policy normalisation.

- The move was relatively limited, with month end extensions set to support the

space. As a reminder Morgan Stanley est. the 1-year+ JGB index will extend by

0.2 years in February vs average of 0.02-0.06 years.