JGB's had a fairly quiet session yesterday,....>

JGBS: JGB's had a fairly quiet session yesterday, and went into the close

slightly higher. The super long end saw some selling ahead of today's 30-Year

auction. The BoJ conducted purchase operations in 5-10 Year maturities, the

operations were taken down fairly smoothly, though bid/cover rose slightly

compared to previous operations with spreads turning negative. JGB's dropped in

the overnight session alongside US debt after a 3-month stop gap deal for the

debt ceiling in the US was announced.

- JGB Look Ahead Barclays: "Today could see an initial sell-side bias around the

superlong end prior to the 30y auction (JX56) after USTs turned down overnight,

but we expect the auction to clear smoothly and subsequent trade to be ranged

overall. We look for decent results at the auction assuming yields near current

levels (WI close on 6 September: 0.815%). The new issue will not be eligible for

BoJ purchase until 15 September, valuations are perceived to be rich and given

the line-up of key events, including the ECB meeting, the risk-reward for rinban

trading looks unattractive. In this context, we see no need to be particularly

aggressive at today's auction."