JGB's rose yesterday, spurred by the BoJ.......>

JGBS: JGB's rose yesterday, spurred by the BoJ raising purchases in the 3-5 Year

sector, yields in the 10-Year sector dropped from 6 month highs as the BoJ sent

several firmly dovish signals. In the US the curve flattened, the 10-Year yield

touched 2.75% at one point after strong ADP employment data and a slightly

hawkish FOMC, but a wave of buying heading into month end took yields off highs.

The US tsy said they will increase issuance from February.

- JGB futures down 5 ticks in early trade last at 150.27, some caution over the

10-Year auction is seeing selling in the sector, 10-Year yield up 0.7bp at

0.092.

- JGB Outlook Barclays: "Today could see sellers take a slight upper hand in the

long-term sector, led by futures, ahead of the 10y auction (JB349). We expect

the auction to clear smoothly with yields near current levels (WI close on 31

January: 0.08%). Although rising US yields are a concern, the BoJ has shown its

commitment to guarding the current upper bound of permissible fluctuation in 10y

yields under YCC and the sector does not appear particularly rich on the curve,

so we believe the auction is likely to spur a decent level of demand."