JGB yields edged higher in early dealing,......>

JGBS: JGB yields edged higher in early dealing, with the belly underperforming,

as 10-Year yields finished the morning session at 0.11% (a key threshold for the

BOJ's YCC in recent days).

- The BOJ stepped in during the afternoon session, offering to buy an unlimited

amount of JGBs at 0.10%, this is the third such offering in the last week, with

the rate matching that seen in Friday's operation. The question remains, is the

BOJ trying to lull the market into a false sense of security re: tomorrow's

MonPol decision, or is it showing that it doesn't intend to budge from its

current MonPol settings?

- Yields edged lower on the back of the announcement, benchmark 10-Year JGBs

last yield 0.106%.

- Futures have softened, although they haven't managed to breach Friday's low of

150.45, where they trade last after a brief blip higher on the back of the

announcement of the latest fixed rate operation.

- JGB volatility remains (understandably) elevated, at least by recent

standards, heading into tomorrow's BOJ MonPol decision.