The JGB curve steepened on Wednesday as the....>

JGBS: The JGB curve steepened on Wednesday as the BoJ left the size of its

Rinban operations covering the 1-10 Year area of the curve unchanged. Looking at

the breakdown of the ops, the offer to cover ratio of the 5-10 Year bucket

continued to move higher after the BoJ trimmed the size of its operations

covering the bucket last Friday, while the 3-5 Year bucket's offer to cover

ratio eased a tad and the 1-3 Year bucket's offer to cover ratio fell from above

5.0 to ~3.6. JGB futures softened in the afternoon session, as a result of the

softer 5-10 Year demand/supply balance in the Rinban, while the Nikkei 225

ticked higher adding a little more pressure. The softening of the long end could

be seen as a degree of concession heading into today's liquidity enhancement

auction for 15.5-39 Year JGBs. 

- USDJPY had a brief look above its 2100-DMA in NY hours with risk on flows

apparent. Barclays suggest that "today could see the market digest the liquidity

enhancement auction without a hitch, but the curve could continue to

bear-steepen modestly amid risk-on flows after US and European yields rose

overnight."