JGBs experienced 2 sharp sell offs on..........>

JGBS: JGBs experienced 2 sharp sell offs on Wednesday. There was no particular

fresh catalyst for the first move, but the space eased after BOJ Gov. Kuroda

suggested that yields would be allowed to fluctuate by around double the amount

that was previously prescribed in his press conference Tuesday.

- Short positioning into the BOJ decision may have exacerbated Tuesday's bid.

- The sell-off resumed in the afternoon as the JSCC noted that there had been an

emergency margin call for JGB futures, with futures punching a new low, 10-Year

yields closed at 0.131%.

- The latest BOJ Rinban ops saw the Bank leave the size of the ops covering the

1-3 & 3-5 Year buckets unchanged. Looking at the breakdown of the operations,

the offer to cover ratio of the 1-3 Year bucket ticked up to 3.77 from 3.35,

while the 3-5 Year bucket's offer to cover ratio rose to 3.01 from 1.93.

- Futures closed below the 02 Feb 2018 low (150.09), with bears now eying the

July 07 2017 low 149.65, with a break opening up a move to the Feb 03 2018 low

(149.28). - Focus today falls on 10-Year JGB supply.