JSDA data for July shows that trading volume...>

JGBS: JSDA data for July shows that trading volume has dipped despite the rise

in yields globally following hawkish central bank comments. In early July the

10-Year JGB yield hit 0.105% inciting the BoJ to increase their bond buys in the

5-10 Year zone by Y50bln to Y500bln.

- As a general trend net purchases reduced in July compared to June. City banks

reduced net purchases to Y433.3bln from Y23.219bln in June, Trust Banks reduced

net purchases to Y265.1bln from Y845.7bln in June, Regional Banks reduced

slightly but Second Tier Regional Banks switched from net selling of Y31.6bln to

purchases of Y120.1bln, while Investment Trusts switched to a net sale of

Y33.2bln from net purchase of Y317.6bln in June. 

- Foreigner purchases dropped to Y15.759tln from Y17.468tln in June, denoting

the 37th straight purchase - though Y14.8tln of this was bills. The Long Term

sector was more attractive to investors with 20-Year yields rising above 0.60%

and prompting dip buying. Bank of America note that the add on interest to ASW

has declined under YCC which is impacting foreigner demand, and leading to the

MOF to tout foreign participation directly.