JGB's seeing some bull flattening, moving in...>

JGBS: JGB's seeing some bull flattening, moving in line with global bonds after

UST's finished higher and flatter as 30Y, 10Y note esp. drew buying; striking as

$34B 5Y auction drew so-so demand, but later had profit in aftermkt. The $13B 2Y

FRN reopening had reasonably good bid: 3.5bp discount margin; strong 62.7%

indirects bids, no directs, left small 37.3% for dealers. 2-/10-Year UST spread

just above 10 year low at around 52bp, sources note year end flow is responsible

for the move as opposed to anything macro.

- JGB's last up 5 ticks at 150.74, the overnight session saw slightly higher

volumes (4k vs 1.1k yesterday) but trade expected to be thin. Industrial

Production and Retail Sales data did little to move JGB's, but strong Retail

Sales data is being adduced for a stronger yen in the session. BOJ Dec minutes

were unsurprising, maintained a dovish tone and concurred with recent BoJ

rhetoric.