The 20-Year sector unwound the concession......>

JGBS: The 20-Year sector unwound the concession that was evident ahead of

today's 20-Year JGB supply as the curve bull flattened in the afternoon session,

aided by the low price of the auction meeting the BBG dealer poll exp. and a

slightly higher cover ratio when compared to the most recent auction. The tail

of today's auction was a touch wider than that seen at last month's 20-Year

offering, although the average yield was ~5bp lower, so that was to be expected.

The auction comes at a time when demand for super-long paper is under question,

in the short term at least, after the BoJ trimmed the size of its 10-25 Year JGB

purchases last week, which triggered a surge in the offer to cover ratio at this

week's 25+ Year Rinban operations (as the measure touched a near 5-Year high).

The latest 10- & 30-Year JGB auctions, conducted on Feb 5 & Feb 7 respectively,

were stellar, with many suggesting that lifers were underweight super-long paper

heading into FY end. Futures ticked away from lows on the back of the auction.

- The space had little reaction to comments from BoJ Gov. Kuroda who noted that

"the BoJ will consider conducting additional easy policy," if the achievement of

the 2% price is undermined due to developments of foreign exchange rates.