JGB futures were insulated from the broader....>

JGBS: JGB futures were insulated from the broader noise, finishing +17, above

Friday's highs and just shy of best levels. Some long-end vol. crept in during

early afternoon trading as Rinban ops covering 10-25+ Year JGBs saw the cover

ratios jump after the BoJ reduced the number of ops covering the buckets in Feb

(to 2 from 3), although there may have also been some profit taking via the ops.

- Long end buyers stepped in on the pullback, seeing opportunity in 30s and 40s,

curve bull flattened on the day with fresh lows in yield terms for both of those

tenors late in session.

- Just worth highlighting that if the BoJ buys the same amount of 10-25 Year

JGBs at the single remaining Rinban operation covering this bucket in Feb then

it will buy Y240bn worth of JGBs in the bucket in total this month vs. Y300bn

last month. In the 25+ Year bucket, a steady purchase size at the final Rinban

Feb op covering the bucket would see the total monthly purchase amount covering

the bucket fall by Y30bn. Breakdown of operation results below:

- 10-25 Year: Offer/Cover 5.88x (prev. 3.24x) Average Spd -0.009 (prev.-0.011)

- 25+ Year: Offer/Cover 5.71x (prev. 4.26x) Average Spd -0.013 (prev.-0.009)