JGB's went into the close lower on Thursday,...>

JGBS: JGB's went into the close lower on Thursday, an initial blip higher on the

open after weak Industrial Production data took futures to session highs of

151.01 but sellers quickly emerged. The weight of negative sentiment from a sell

off in UST's and EGB' hit JGB markets hard and selling saw futures take out

several technical levels on the way down to hit lows of 150.86, the 21-DMA.

Futures bounced and head into the close at 150.93, down 13 ticks on the day.

- Industrial Production rose 0.5% on the month, missing estimates of a 1.8%

rise. Bond/Stock flow data showed that foreigners were net buyers of Japanese

bonds in the week, shifting from a net sale previously, while outflows from

Japan for bond purchases declined.

- The MOF sold 2-Year paper, the auction was well received though cover dropped

to 4.756x from an elevated 5.933x at the last auction. The cut off price was

above estimates and the short end saw a bid after the auction. On the run 2-Year

(#382) yield last up 0.4bp compared to a 1.3bp rise for issue #381.

- 10-Yr yield last up 0.8bp at 0.038, sell off led by the belly in futures

sensitive 7-Yr sector. Mkt await BoJ Dec purchase plan at 0800GMT/1700JST today.