JGB futures moved back to highs after the......>

JGBS: JGB futures moved back to highs after the BOJ announced that it will buy

some Y400bn worth of 5-10 Year JGBs late in the session (smaller size than the

most recent Rinban operation covering that bucket, Y410bn). The unscheduled

operation does not cover the benchmark #JB351 10-Year JGB, which was auctioned

earlier today.

- JGB futures sat around best levels at lunch break, but slipped in early

afternoon dealing on the back of the latest 10-Year JGB auction. Although the

bid-to-cover held up, there was a 1.2bp gap between the average and high yield,

underscoring the scepticism that some dealers held heading into supply on the

back of the recent run of volatility in the space. Some 48.9994% of the paper

was allotted at the high yield, up from the prior 38.2288%. The low price of the

auction was also significantly softer than expected at 99.62 vs. exp. 99.73.

JGB's couldn't manage a break of the early session lows on the move.

- BOJ's Amamiya has noted that there was a slight difference in opinion on the

Board re: the BOJ's 10-Year yield target range.