JGBs are well bid, benefitting from the........>

JGBS: JGBs are well bid, benefitting from the continued coronavirus induced

uncertainty at home & abroad (including a 2nd coronavirus case for 1

individual), with dovish musings from BoJ reflationist Kataoka also evident, but

of no surprise. Morning reports from the Nikkei pointed to the gov't mulling an

extra budget on the back of the virus outbreak. Futures finished comfortably

higher on the day, but didn't manage to close above yesterday's peak, despite

looking above there when risk-off flows intensified in the Tokyo afternoon.

- The belly has been the outperformer in cash trade, so the move may be driven

by futures, with super-long swap spreads tighter vs. JGBs on the day.

- The BoJ left the size of the purchases in its latest round of 1-10 Year Rinban

ops unchanged, breakdown as follows:

- 1-3 Year: offer/cover 3.17x (prev. 4.05x) average spread -0.007 (prev. -0.006)

- 3-5 Year: offer/cover 3.54x (prev. 3.02x) average spread -0.011 (prev. -0.008)

- 5-10 Year: offer/cover 2.58x (prev. 2.33x) average spread -0.015 (prev.

-0.014)

- Cover ratios mixed vs. prev., while average spreads nudged tighter.