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

JGBS: JGB's head into the close lower, futures are down 4 ticks on the day at

150.94 but have gained some 6 ticks during Tokyo trade and rallied some 14 ticks

from lows hit in the morning session. Futures declined alongside global bonds as

risk on sentiment took hold amid a lack of activity on the North Korea front.

Sellers took hold initially and pushed futures down to 150.79 lows, but futures

stayed in a 7 tick range.

- Early in the session Japanese PPI was largely ignored, PPI rose 2.9% in

August, slightly below estimates of 3.0% but still a 8th consecutive gain. 

- The BoJ conducted purchase operations in the 1-3, 3-5 and 5-10 Year zones, all

purchase sizes were kept unchanged. The ops were taken down smoothly but

offer/cover ratios were again low and spreads widened which spurred a bid in the

afternoon session.

- The yield curve steepened, the short end seeing buying after selling off in

the wake of a weak 5-Yr auction yesterday. The 20-Year yield underperformed the

long end and saw buying even ahead of the 20-Year auction tomorrow with yields

in the sector down 0.4bp to 0.0551%. 10-Year yield last up 0.3bp at 0.023%.