JGB's head into the close higher, futures......>

JGBS: JGB's head into the close higher, futures last up 17 ticks at 150.94.

JGB's trended lower during the US session alongside US tsys which were offered

after strong CPI data boosted economic confidence ahead of the Fed meeting next

week. This move was reversed early on with futures gapping higher on the open

after North Korea launched another missile over Japan, the second in as many

months. No damage was reported but Japan responded with their usual no nonsense

rhetoric and an emergency UN security council meeting has been called for today.

- The Dec'17 contract has seen some heavy downside since the roll on September

12, and sources note that this flight to safety post North Korea missile launch

caught some off guard and caused a short squeeze in futures which hit session

highs of 150.99 in the morning session. Futures bounced off this level which was

the September 12 hourly resistance.

- The BoJ bought 1-5 and 10+ Year bonds, all sizes unchanged. The operations

were strong which supported the bid in the afternoon. Yields are lower across

the curve with some mild flattening seen ahead of a total of Y16.6tln JGB

redemptions on Sept 20. 10-Year yield last 0.025% down 1.7bp.