JGB's finished higher yesterday, though were...>

JGBS: JGB's finished higher yesterday, though were well off highs into the close

with the move mainly being driven by US tsys. The long end saw some buying in

the morning after a sell off pre 40-Year auction, while the afternoon session

saw short end buying driven by decent 3-month & 2-year auctions.

- Focus will be on the BoJ buying operations today, there is a chance the BoJ

could further reduce the 5-10n Year purchase to Y450bln from Y470bln to bring it

back in line with early July levels. Sources note the BoJ may have been burned

last year when a reduction in purchases sparked a sell off, unchanged purchases

could see a relief rally in JGB's.

- JGB Opening Call Barclays: "Today could see some selling in futures after USTs

fell slightly overnight, but we expect the market to stay in a range overall

with two more buying operations remaining this month (including today's). The

BoJ is scheduled to hold buying operations for 1-5y and 5-10y issues today.

Given the limited downward pressure on medium/long-term yields and the BoJ's

cautious stance on reducing its operations, we expect offers in those sectors to

be unchanged from recent levels."