JGB's sold off in the afternoon session on.....>

JGBS: JGB's sold off in the afternoon session on Thursday after seeing a very

quiet morning, yield cuurve flattened with the long end more resilient. The sell

off comes after five consecutive days of gains, the longest run since April.

5-Year auction was taken down smoothly with cover dropping slightly from the

two-year high at the July issue, despite the 5bp decline in yields.  Sources

noting that pre-auction shorts were sparse due to the run higher, which resulted

in heavy short hedging post auction. The recent rise in JGB's has garnered

speculation that the BOJ could cut purchases further today.

- JGB Opening Call Barclays: "Today could see buyers take the upper hand overall

given the riskoff flows and continued rise in USTs overnight. The BoJ is

scheduled to hold buying operations in the 1-5y and 5-10y sectors. We believe

the sizes of both operations are likely to be unchanged."