JGB's saw quiet trade yesterday, initially.....>

JGBS: JGB's saw quiet trade yesterday, initially dropping on strong Q2 GDP data

after gapping higher at the open, but quickly recovering in thin volumes to

match the highest levels since the end of June at 150.50. The gap higher was

attributable to the Mountain Day holiday on Friday with JGB's playing catch up

with US tsys on North Korea tensions. Yields fell across the curve with moves

fairly even until a spate of buying in the long end towards the close. 

- North Korean tensions have receded slightly today which has seen a slight drop

in US tsys and JPY as safe haven demand wanes, JGB futures still managed to

squeeze out some gains in the overnight session to close at 150.56.

- JGB Opening Call Barclays: "Today could see sellers take a slight upper hand,

especially in the superlong end, on improving risk sentiment following the turn

to the sell side in USTs overnight. We expect trade to remain thin, but look for

the curve to bear-steepen somewhat. The BoJ is not scheduled to hold buying

operations today."