JGB's went into the close slightly higher,.....>

JGBS: JGB's went into the close slightly higher, futures last up 2 ticks at

150.93. JGB's initially opened slightly higher, then moved in a narrow range

during the morning. As the afternoon rolled around a wave of risk off buying

pushed futures to session highs of 151.00. The risk off sentiment was spurred by

the win in the Alabama Senate race by Democrat Doug Jones which erodes the

Republican majority to 51-49 and complicates legislative issues going forwards.

- The BoJ bought JGB's in the 1-10 Year sectors, the sizes were all unchanged

from the previous operations. The offer/cover ratios rose slightly while spreads

slipped in the 1-5 year sectors and post results the short end and the belly

sold off. Futures dropped to session lows, briefly touching 150.89 before

bouncing slightly.

- The curve steepened, the long end sold off ahead of the 20-Year auction

tomorrow, reversing heavy buying so far this week. USD/JPY basis swaps have

risen too which MNI sources note has seen some flows back in to UST's. 10-Year

yield last up 0.3bp at 0.05%, 2-/30-Year spread 0.7bp wider on the day.