JGBs turned bid in the morning session, on.....>

JGBS: JGBs turned bid in the morning session, on the back of the broader risk

aversion noted in global markets. Futures registered a fresh contract high in

the afternoon before running out of upward momentum. Contract still sits 32

ticks higher on the day. Bulls now eye the Nov 09 2016 high at 152.04.

- BoJ Gov. Kuroda did the bid no harm as he noted global risk factors, stressing

that the Bank will act appropriately, and has the capacity to act if required.

- Nikkei 225 ~2.3% lower last, adding additional support.

- Belly of the curve outperforming thus far, with 10-Year yields at 0.045% at

writing.

- Little reaction to today's liquidity enhancement auction for off the run

15.5-39 Year JGBs.

- 3-Month JPY-USD basis swaps have recovered a chunk of the week's earlier

decline over the last 2 sessions.