JGB's head in to the close lower, futures......>

JGBS: JGB's head in to the close lower, futures last down 10 ticks at 150.70.

News flow has been quiet and trade has been thin, just 1,108 contracts have gone

through in trade so far.

- JGB's sluggishly trended lower throughout the session and head into the close

near lows. 

- The BoJ purchased JGB's in <1-5 Year sectors, cover rose slightly to 3.57 from

3.22 in the 3-5 Year sector and spreads widened, this contributed to the sell

off in the afternoon. The <1-Year and 1-3 Year results saw the offer/cover drop

which supported the short end.

- The drop came despite positive supply/demand conditions into year-end, the BoJ

conduct their final purchase operation in the long end tomorrow. Stocks rose,

boosted by the rise in energy shares, which saw a sector rotation and kept bonds

subdued.

- Yield curve steepened, strong results saw buying in the short end while the

long end rose slightly, futures sensitive 7-10 Year sector underperformed,

10-Year yield up 0.6bp at 0.055%.