The long end of the JGB curve continued its....>

JGBS: The long end of the JGB curve continued its recent round of

outperformance, although eased back from best levels on the risk off flows that

were seen in the latter part of the session.

- We have highlighted the lifer demand in the longer end owing to unattractive

FX hedged EZ bond yields before, and the tighter JSCC/LCH spread also points to

foreign swap receiving demand.

- The BOJ left the size of its Rinban operations covering the 1-5 & 10-25+ Year

sectors unchanged today. Looking at the breakdown of the operations the offer to

cover ratio of the 1-3 Year operations eased after ticking higher in the

previous operation, while the offer to cover ratio of the 3-5 Year ops surged to

4.8 from 3.2, the 10-25 & 25+ Year operations' offer to cover ratio held steady.

- Bulls look to 151.02-19 where the 2018 & monthly highs are situated. Daily

studies looking to correct from modestly overbought levels and the lack of

topside follow through remain concerns for bulls. In saying that, bears still

need a close below 150.89 to signal a false break higher and return initial

focus to 150.71-80.