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

JGBS: JGB's head into the close higher, futures up 8 ticks at 150.50. Amid a

lack of domestic catalysts price action was dictated by nervy, choppy trade in

UST's which themselves were pushed around by fluctuations in US equity futures.

Despite a drop in the middle of the morning session alongside UST's JGB's held

most of the gains made at the open going into the close. The Nikkei dropped

sharply closing down 508 points at 21,382 while the Topix dropped to record the

worst week since early 2016.

- The BoJ purchases 1-5 and 10+ Year JGB's all sizes unchanged from the previous

operations, cover for the short end ops was weaker than the previous purchases

at higher spreads, while 10-25 Year purchases saw a jump in cover to 3.34 from

2.15. Recent BoJ actions have signalled to the market that the BoJ can tolerate

a steeper yield curve, leaving the front end well anchored but imparting a

selling bias on longer maturities.

- Yields lower across the curve, seeing some steepening, 3-Year sector

experiencing some decent buying on strong BoJ purchase op. 10-Year yield last

down 0.8bp at 0.073%.