JGB's moving higher at the open, tracking......>

JGBS: JGB's moving higher at the open, tracking the move in US tsys and

rebounding following yesterday's decline. JBU7 last at 150.21, up 10 ticks on

the session, down 6 ticks from the US open on Wednesday.

- Japanese buy Y1.178tln of foreign bonds in the latest week, adding to strong

purchases made since the start of July. The purchases come as Japanese investors

seek yield, US 10-Year yield has risen around 15bp since the end of June, with

expectations of a weaker yen on diverging central bank policies also driving

purchases. Evident in further decline in yen basis swaps over the past month,

6-Month basis swap down 10.75bp.

- Sources note that shorter maturities of foreign bonds in favour heading into

the summer, foreign money market instruments also bought to the tune of

Y55.3bln, but net flows swing the other way, foreigners bought net Y838.5bln of

Japanese money market instruments as debt ceiling in the US looms.