The belly of the curve softened after the......>

JGBS: The belly of the curve softened after the BoJ reduced the size of its

Rinban operations covering the 5-10 Year bucket by Y20bln, which dragged the

remainder of the space lower, although we now operate off of worst levels. It is

worth noting this is a relatively small reduction, especially as the BoJ raised

the size of purchases in this sector by 40bln back on Feb 02 2018.

- The move is intended to keep the yield curve/outright levels of yield in

check, and doesn't signal a change in policy.

- Looking at the breakdown of the operations, the offer to cover ratio moved

higher, while the spread moved into positive territory, although, all in all it

looks like the operation cleared smoothly.

- 7-Year paper is the underperformer.

- Futures have moved back from worst levels after a brief look below the 55-DMA

at 150.83.