JGB's go into the close higher, futures up.....>

JGBS: JGB's go into the close higher, futures up 15 ticks at 150.32. There were

several dovish drivers of price action today, the BoJ Summary of Opinions

repeated the mantra that easy policy was still needed as Japan still has some

way to go to hit 2%. BoJ Gov. Kuroda said the same thing in DIET. The BoJ then

raised their 3-5 Year purchases by Y30bln to Y330bln, which really lit a fire

under JGB markets and saw yen weaken. Finally BoJ Deputy Gov. Iwata said that it

is a mistake to think the BoJ will hike rates soon.

- The BoJ bought JGB's in the 1-3, 3-5, 10-25 and 25+ Year JGB's today, raising

the 3-5 Year purchase by Y30bln to Y330bln and sending a dovish signal in the

process. The rest of the operations were unchanged and taken down smoothly. The

move sparked a buying frenzy and dragged yields from highs, the 10-Year yield

last down 1bp at 0.084%, retreating from a 6 month high hit yesterday.

- The move saw LCH/JSCC spreads narrow, as another dovish signal convinces

overseas investors that the BoJ are not on a tightening path and sees unwinds of

positions from earlier in the month.

- Market looks ahead to the BoJ bond buying plan for Feb at 0900GMT/1700JST.