JGB's slipped on Friday after playing catch....>

JGBS: JGB's slipped on Friday after playing catch up with global bond declines

that happened during the Japanese market closure on Thursday. The BoJ cut

purchases in 25+ year JGB's which helped accelerate the decline. The move is

said to have been due to flattening of the yield curve, but raised some eyebrows

ahead of the 40-Year sale on Tuesday. As a result of the BoJ purchase reduction

the curve saw some bear steepening, 10-/30-Year spread finished the session

1.5bp wider. 

- So far today JGB's are slightly lower, last at 150.99 after bouncing off

session lows at 150.95.

- JGB Opening Call Barclays: "Today could see sellers continue to take the upper

hand around the superlong end ahead of 40y auction after the selling in USTs

last week. The BoJ is scheduled to hold buying operations for 1-5y issues and we

expect an operation for - 1y issues as well. This week's highlights include a

40y auction on Tuesday as well as a 2y auction and the BoJ's announcement of its

December buying operation plans, both on Thursday. We expect the BoJ to leave

its buying ranges unchanged from November across all sectors."