JGB's closed mostly higher, the super long.....>

JGBS: JGB's closed mostly higher, the super long end slightly lower as players

jump from 40- to 30-Year maturity after the auction. JGB futures up 6 ticks at

150.37 at the close. JGB were higher from the open, rebounding after futures

sold off overnight alongside UST's. After the initial leg higher futures moved

in a 7 tick range. The MOF sold 30-Year paper, despite expectations for solid

demand the auction was average, covered 3.767x (down from the 4.377x 2.5 year

high previously), the tail rose sharply to 0.13 from 0.04.

- There were a few reports of interest during the session, but these were mostly

shrugged off. A Bloomberg sources story reported that while BoJ officials

supported current easing, there was a contingent that wanted to begin dicussions

of policy normalisation. There were also reports that the MOF would reduce the

JGB issuance front loading cap for FY18 due to low rates not attracting

investors, a move that could spur liquidity concerns.

- Yields lower across the curve with the exception of the 40-Yr bucket. 10-Yr

last -0.7bp at 0.08%, bringing it away from the highest levels since July. 5-Yr

sees outsized move -0.9bp after selling sharply led by the future yesterday.