The 5-10 Year sector of the curve continues....>

JGBS: The 5-10 Year sector of the curve continues to underperform in cash trade,

which will likely be hindering futures, with the contract last +9 after failing

to break through its overnight highs just after the Tokyo re-open.

- The BoJ lifted the size of its 1-3 Year JGB purchases, while leaving the sizes

of 3-5 & 10-25 Year ops unchanged. This wasn't a surprise, given that it was the

first round of Rinban ops covering the 1-3 Year bucket since the release of this

month's Rinban schedule. A reminder that the schedule saw an uptick for the

purchase ceilings across the buckets covering JGBs with up to 10 Years until

maturity. The BoJ is contending with an increase in issuance from the MoF and

wants to promote a steeper yield curve, which explains the lift in purchase

sizes in the 1-5 Year zone of the curve over the last few days.

- Reports pointing to a second consecutive day of >100 new COVID-19 cases in

Tokyo may be providing light support, although Chief Cabinet Secretary Suga has

played down the need for an imminent declaration of a state of emergency.