JGB futures tested key resistance at 153.00,...>

JGBS: JGB futures tested key resistance at 153.00, on the back of the breakdown

of the latest round of BoJ Rinban operations after the Bank left the size of its

5-25+ Year operations unchanged, but the contract has eased back from the level.

The suppressed outright JGB yield levels have resulted in speculation suggesting

that the BoJ may have to trim its JGB purchases again owing to the flatness of

the curve, which saw an uptick in the offer to cover ratios in the wake of the

most recent adjustment to purchase sizes.

- Offer to cover ratios of today's operations were as follows:

- 5-10 Year 2.50x (prev. 3.10x), 10-25 Year 2.31x (prev. 2.60x), 25+ Year 3.26x

(prev. 4.71x), JGBi 5.13x (prev. 4.72x).

- The belly of the curve has outperformed for the majority of the session, with

the yields in the wings a touch higher on the day at writing (this comes after

super-long yields moved into negative territory in the early part of the

afternoon).

- Japanese PM Abe met with BoJ Governor Kuroda in a regular meeting today,

although no comments of note have emerged.