Quiet session for JGB's yesterday, markets.....>

JGBS: Quiet session for JGB's yesterday, markets moved in a narrow range in the

morning, with some weakness in the afternoon session resulting in a close around

3 ticks lower in futures. Yield curve steepened slightly with some selling seen

in the belly/long end ahead of upcoming supply. The main mover was Tibor with

the fix jumping and resulting in selling in Euroyen futures. BoJ kept August

purchases unchanged.

- Opening Call Barclays: "Today could see sellers initially take the upper hand,

especially in the long end, prior to the 10y JGB auction (JB347) after US and

European bonds showed little price action overnight. However, we expect the

auction to clear smoothly and ranged trade to follow in the absence of any

noteworthy catalysts. The auction should produce decent results assuming yields

near current levels (WI close on 31 July: 0.075%). Current yields are slightly

lower than the average yield at the previous auction (0.079%), which produced

very strong results. However, we believe there will still be a certain level of

demand for 10y JGBs given the low volatility under YCC and look for the auction

to go without a hitch in this context."