JGB futures hold lower in Tokyo hours after....>

JGBS: JGB futures hold lower in Tokyo hours after softening in the overnight

session, alongside Tsys.

- The contract has stuck to a tight range in Tokyo trade, last -14 with the

curve twist flattening.

- The only real matter of note was that the BoJ cut the size of its 5-10 Year

JGB purchases by Y30bn in the latest round of Rinban ops, but the move in

futures was limited & quickly retraced. Perhaps some see the reduction as a

means of making way for further BoJ easing in October? The details of of the

operation revealed that the offer to cover ratio ticked higher, to 2.82 vs. 1.74

prev., while the average yield spread eased to 0.9bp from 2.1bp.

- Elsewhere, we flagged Wednesday's Nikkei sources story which suggested that

the Government Pension Investment Fund (GPIF) will begin allocating substantial

amounts of money to green bonds as early as the fiscal year beginning next

April.

- BoJ Governor Kuroda will make an address in just over an hour's time, while

Tokyo CPI data & 2-Year supply provide the highlights of Friday's local docket.