The 5-7 Year sector of the curve...............>

JGBS: The 5-7 Year sector of the curve underperforms in cash trade, although

futures caught a bid in the afternoon, contract last +17, having a look through

the overnight high, dragging 7s off intraday cheaps in the process.

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

3-5 & 10-25 Year ops unch.. This wasn't a surprise, given that it was the 1st

round of Rinban ops covering the 1-3 Year bucket since the release of July'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 til maturity. The

BoJ is contending with an increase in issuance from the MoF & 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. The breakdown of the ops revealed a

narrowing of spreads across the board, with offer/cover ratios steady to lower.

- A second consecutive day of >100 new COVID-19 cases in Tokyo may also be

providing light support, although Chief Cabinet Secretary Suga has played down

the need for an imminent declaration of a state of emergency, while Tokyo

Governor Koike pointed to the need for "additional caution."