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JGB futures last traded 7 ticks.........>

JGB SUMMARY: JGB futures last traded 7 ticks higher at 150.79 as the curve
flattened, with demand stemming from a pullback in the Nikkei 225 & a
corresponding bid in US Treasuries.
- The BoJ conducted Rinban operations across the 1-10 Year buckets, with the 1-3
Year cover ratio a lower this time out, while the 3-5 & 5-10 Year buckets' cover
ratios ticked higher alongside a narrowing in the 5-10 Year bucket's yield
spread. These factors alongside a slightly flatter US curve probably led to the
early modest flattening that we saw in the cash space, before light buying
occurred in the 1-3 Year area of the curve in the afternoon as the 225 fell. 
- The swap curve also flattened, but was mostly a little wider against JGBs.
- This came after yesterday's news that Japan's JGB transactions totalled
Y41.4tln in Jan vs. Dec's Y41.8tln & FY17 monthly average of Y43.3tln, although
Barclays note that activity was brisk among some investors with dip buying
apparent. Foreigners logged a net sale of Y759bln, their largest sell size since
November 2013, with BoJ normalisation chatter and higher global yields the most
likely catalysts for the sales.
MNI London Bureau | +44 0203-865-3809 |
MNI London Bureau | +44 0203-865-3809 |

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