JGB futures went into the lunch break 4........>

JGBS: JGB futures went into the lunch break 4 ticks softer at 150.63, pretty

much mid-range, after a brief foray higher in early dealing was met by sellers.

- Futures eased following reports from Kyodo re: comments from a ruling LDP

party off'l, who suggested that dissolving the lower house is 1 option available

to the party in light of the recent political scandal & fall in PM Abe's

approval rating. This would bring the longevity of Abenomics into question. 

- Outside of this, the sell off coincided with US Tsys moving lower, as the US

10-Year yield breached 3.00%, although the move was brief, with JGBs retracing

alongside US Tsys.

- The BoJ left the size of its Rinban operations covering the 5-25+ Year buckets

unchanged in today's round of operations. Looking at the breakdown, the 5-10

Year bucket's offer to cover ratio was largely stable as the yield spread

moderated. The 10-25 Year bucket's offer to cover ratio eased, as the yield

spread moderated. The 10-25 Year bucket's offer to cover ratio edged up as the

yield spread moved into negative territory.

- The belly of the cash space has underperformed on the session thus far.