JGB futures moved higher Wednesday, with the...>

JGBS: JGB futures moved higher Wednesday, with the super-long end of the curve

outperforming in cash trade. The BOJ left the size of its Rinban ops covering

the 5-25+ Year buckets unchanged. Looking at the breakdown of the ops, the 5-10

Year bucket's offer to cover ratio ticked up to 2.95 from 2.39, while the offer

to cover ratio of both the 10-25 & 25+ Year buckets moderated to 2.35 & 1.84

from 2.94 & 4.19 respectively, which facilitated the super-long end rally.

- The Nikkei has suggested that the BOJ may purchase more ETFs tied to the TOPIX

and less ETFs tied to the Nikkei indices, with the aim of the review being to

curb excessive impact in pricing of member stocks. The story also suggested that

the BOJ is to revise its inflation forecast lower at its next meeting.

-  As noted earlier, at its July meeting, the BOJ will consider allowing the

nearly flat JGB curve to steepen slightly, recovering some functions of the

tepid market while keeping the stimulative effects of large-scale monetary

easing, MNI understands. Bulls now look to yesterday's high (150.79) in futures,

then the 55-DMA (150.84), while support is noted at the July 24 high (150.68),

followed by yesterday's low (150.57). ST focus is on today's 2-Year supply.