JGB's softened in afternoon dealing,...........>

JGBS: JGB's softened in afternoon dealing, although futures held on to gains,

last trading 6 ticks higher at 150.89. The curve flattened, with 10-Year yields

last at 0.054% (-0.2bp).

- It is quite possible that the downtick in the afternoon came as a result of

the Nikkei 225 moving to session highs.

- The afternoon move developed despite the drop in the offer to cover ratio in

the latest BoJ Rinban operations covering the 10-25 Year bucket & as the yield

spread on the purchases moved back in to negative territory.

- Earlier Japan's latest CPI data held steady, beating expectations, although

market reaction to the release was muted.

- On the technical front fresh 2018 and 2mth highs continue with bulls now

focused on 150.97-151.02 where the daily bear channel top is noted. A close

above 151.02 is needed to shift focus to 151.19-37. Daily studies now at O/B

levels is the key concern for bulls. In saying that, bears now need a close

below 150.85 to ease pressure on resistance layers and below 150.71 to return

initial focus to 150.47-51.