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

JGBS: JGB's head into the close lower, futures last down 6 ticks at 150.70.

JGB's intially dropped, pressured by steepening of the curve in EGB's and UST's

before hitting 150.54 the High Nov 2 now support and bouncing heading into the

BoJ rate announcement. 

- As expected the BoJ kept all policy on hold, voting 8-1. Kataoka, who joined

the board in July, lodging dovish dissent for the 3rd meeting, although he

didn't propose any specific policy. The BoJ upgraded their consumer spending and

business investment outlook but sounded a cautious note over inflation.

- Yields higher, the curve bear steepens. 10-Year yield up 0.3bp at around the

highest levels since Nov 1 at 0.062%. 2-/30-Year spread widens 0.7bp.

- LCH/JSCC clearinghouse basis widened, MNI sources posit that LCH clients

resuming paying swaps, basis narrowed slightly last week after widening around

1.875bp since the start of September. The 10-year pushed out by 0.7bp to 5.5bp.

- Short end paper firmed despite the weak 3-Month auction yesterday. Sources

note that the auction had 66% taken by anonymous bidders. Bills were supported

today ahead of the BoJ bill purchase tomorrow.