The JGB curve has steepened today, although....>

JGBS: The JGB curve has steepened today, although yields are off of best levels

after the 10-Year measure breached Monday's high. Desks are pointing to a couple

of protagonists behind today's move. Firstly the global bond sell off observed

late Wednesday and secondly a JiJi article that didn't get much coverage, which

once again points to the BOJ raising the upper bound on 10-Year JGB yields from

0.1% at its meeting next week, while the article expects the BOJ to maintain the

central target of around 0%.

- The latest 2-Year JGB auction generated lacklustre results with the average

price (100.437) coming in below the estimate of the low price among dealers

(100.44), with the bid to cover a shade softer when compared to the most recent

auction, although it remained well above 4.000, albeit well shy of the 6 auction

average of 5.113. There has been little reaction observed in the 2-Year cash

space that could be deemed auction-based.

- Futures have failed to gain momentum below yesterday's low (150.57) thus far,

with a clean break opening up a move to hourly support from July 24 (150.45).