The curve steepened yesterday, as shorter......>

JGBS: The curve steepened yesterday, as shorter dated paper outperformed and the

super-long end met sellers ahead of FOMC Chair Powell's semiannual testimony to

congress alongside the Nikkei 225 printing gains of over 1.0%.

- In US dealing the Tsy space softened following Powell's upbeat comments on the

US economy with the belly underperforming.

- Today, markets need to digest Japanese industrial production & retail sales

data, as well as BoJ Rinban operations in the 1-5 Year & 10-25+ Year buckets and

the BoJ announcing its bond buying schedule for March.

- Barclays suggest that "given the overnight selloff in USTs on the back of rate

hike expectations, today could see sellers take the upper hand in the JGB

market, although any downside in the super-long end should be limited given the

favourable supply & demand driven linked to the big month-end extension. The BoJ

is scheduled to hold buying operations for 1-5y & 10y+ issues. We expect the

offer sizes to be unchanged. Given persistent concerns about JPY appreciation,

we also expect the BoJ to retain the sizes of its operations across all sectors

when it releases its plans for March this evening."