JGB's opened slightly lower in Tokyo,..........>

JGBS: JGB's opened slightly lower in Tokyo, 10-Year future last down 1 tick at

150.47. JGB's rose yesterday after dropping sharply since Tuesday when the BoJ

cut purchase ops. The Bank kept 1-10 Year ops unchanged. The results of the ops,

however, illustrated that the market is clinging on to the tapering theory,

cover ratios rose in all maturities. Yields were lower across the curve seeing

some twist steepening, pulling back from multi-month highs. Long end swaps

cheapened and LCH/JSCC basis swaps narrowed after the BoJ ops. Barclays on

JGB's: "Today could see the 40y auction (JU10) clear smoothly after USTs were

bought in the long end overnight, with buying pressure strengthening somewhat

around the superlong end in the afternoon. We expect solid results at the

auction assuming yields near current levels. Yields at 1% should spur some

demand from lifers and other real money accounts. That said, there appears to be

some lingering concern about BoJ buying operations in the superlong end after

Monday's reduction and supply and demand in the sector could tend to slacken

with a 30y auction to follow next week and a 20y auction coming the week after

that. In this context, any move to chase prices higher could be limited."