JGB's close lower on Tuesday even as equity....>

JGBS: JGB's close lower on Tuesday even as equity markets declined, pressured by

selling in UST's where yields hit the highest levels since 2014. The sell off

pushed yields in Japan higher, the 10-Year yield rising 0.7bp a the close to

0.093%. The yield briefly touched 0.096%, the highest since July 2017 when the

BoJ conducted an unlimited purchase operation in the 10-Year sector at 0.11%

yield.

- Data at the start of the session did not provoke much of a reaction in bond

markets, the data saw strong Retail Sales and Labour Market but a drop in

Household Spending. The data indicates solid consumption in preliminary

October-December GDP data due out on Feb. 14, which looks to have added some

downside pressure.

- The MOF sold 2-Year debt, the first sale of issue 385. The sale was strong

with bid/cover rising to 5.022 from 4.319, holding above the 4.00 threshold for

the 11th consecutive auction. The tail narrowed to 0.003, the lowest since July.

- Market looks ahead to the BoJ purchase ops tomorrow (1-5 & 10+ Year), as well

as the announcement for the February purchase plan after market tomorrow.