JGB's have largely ignored the Japanese data...>

JGBS: JGB's have largely ignored the Japanese data dump earlier in the session.

The CPI data was always going to be a damp squib with the BoJ recently pushing

back estimates of when the 2% inflation target would be hit and acknowledgement

of a weak inflation trend.

- Markets also chose to ignore the strong Household Spending data (2.3% vs 0.5%

estimate and -0.1% in May) and a jobless rate that matches a multi-year low at

(2.8% vs 3.0% estimate and 3.1% in May).

- The BoJ Summary of Opinions from the July meeting also seems to have been

ignored. This was the last meeting with Kiuchi and Sato (only hawkish

dissenters) on the BoJ board, so the scope of policy debate will likely change

significantly at the next meeting in September. One member did note that the

10-Year yield target shouldn't be taken so strictly, while one member proposed a

Y45tln monetary base target (currently Y80tln) and a gradual exit.

- JGB's moving in a range with some selling seen at the long end of the curve

with yields outperforming swaps. Focus now on the BoJ purchase operations, small

chance of reduction in 5-10 Year purchases (last Y470bln)