JGB futures have virtually unwound their.......>

JGBS: JGB futures have virtually unwound their overnight losses after an early

look lower, last -4 (after briefly trading in positive territory). A decent

2-Year auction helped as the tail tightened and cover ratio hit the highest

level seen at a 2-Year auction since August last year. Low price also topped

dealer exp. It looks like FX hedged yield pickups from abroad outweighed any

worry re: greater supply needs to finance the supplementary budget, aiding

demand.

- Belly underperforms on the day, with the aforementioned auction supporting

short paper in the afternoon and longs still supported by the hunt for carry

ahead of the Golden Week break.

- We also saw the first ever negative fixing for 3-Month Euroyen today.

- Participants may have also looked to comments from Dai-ichi Life, made late

Wednesday, as the insurer noted that it plans to increase its holding of yen

bonds in the current fiscal year after its holdings fell in the 12 months to the

end-March. Eyes on other names who will continue to report intentions.