JGB futures offered in early Tokyo trade,......>

JGBS: JGB futures offered in early Tokyo trade, with the contract last -10,

through the overnight lows, as participants react to overnight developments and

the bid in domestic equity markets.

- Light outperformance in the front end/belly of the JGB curve, with twist

steepening apparent, even ahead of 2-Year supply. Participants seemingly expect

little in the way of long end support via the BoJ's July Rinban outline, which

will be released after hours. The BoJ has a preference for a steeper curve, with

Mizuho recently suggesting that "while the steepening trend may have a little

further to run, the BoJ is counting on domestic investors to step in when

long-dated JGBs become more attractive than overseas bonds and that the BoJ will

step up if necessary via increased purchases."

- Domestic labour market & industrial production data was softer than expected.