JGB futures were offered on the NY risk-on.....>

JGBS: JGB futures were offered on the NY risk-on spill over, with a fairly

mediocre round of 2-Year JGB supply seen. Contract -17, twist steepening of the

curve evident. Participants expect little in the way of long end support via the

BoJ's July Rinban outline, which will be released after hours, given the Bank's

preference for a steeper curve. Mizuho have suggested 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."

- In terms of 2-Year auction specifics; the latest offering was a little weaker

across all the major measures (bid/cover, tail width and % allotted at high

yield) when compared to the previous auction, but the low price still topped

dealer expectations. The auction was by no means weak, with the cover ratio

edging back towards the recent norms after the jump seen at the last 2 auctions.

- Finally, local reports suggested that Tokyo will not be setting numerical

guidelines re: imposing COVID-19 restrictions, with the daily case count

hovering above the previously outlined 50 level.