JGB's head into the close higher, though off...>

JGBS: JGB's head into the close higher, though off session highs and having

posted smaller upside moves than global counterparts. JGB's are supported by

ongoing tensions with North Korea. 

- Following the 10-Year auction yesterday the on the run 10-Year issue is now

the new issue #348. A fairly weak auction yesterday saw the sector sell off,

pushing the yield on issue #348 into positive territory, this move has been

mostly reversed today as risk off trade sees flows into JGB's. 10-Year yield

last down 0.5bp on the day at 0.01%.

- The BoJ purchased linkers and in the 5-10 Year zone, keeping purchase sizes

unchanged. Bid/Cover was broadly unchanged in the 5-10 Year zone, but spreads

dropped into negative territory, indicating participants are keen to offload the

securities. The purchase had little effect on futures, which saw a 7 tick range

through the whole session, last up 5 ticks at 151.27.

- The MOF sold 6-Month bills, the sale drew an average yield of -0.1983%, some

8bp lower than the last auction thanks to the recent rally in JGB's, which saw

cover drop to 3.40 from 4.66 last time out.