The long end of the JGB curve firmed ahead.....>

JGBS: The long end of the JGB curve firmed ahead of 30-Year supply yesterday, on

the back of some underperformance on Wednesday.

- The auction went well despite some worry surrounding participation heading

into supply. It would appear that the higher outright yield level and relative

cheapness on the curve drummed up demand, with the bid-to-cover ratio sticking

above 5, although moderating from the 6-Year high seen last time out.

- This allowed the longer end to consolidate gains, and meant that the curve

flattened on the day, while 10-Year futures made new highs before retracing,

sticking to a tight range.

- Focus now falls on Japanese GDP, due today, as well as the BoJ's latest round

of Rinban operations covering 1-5 and 10-25+ Year paper.

- It is also worth keeping an eye on the U.S.-Japan trade talks. Japanese

Economy Minister Motegi has noted that the first day of talks were frank, but

deepened the mutual understanding between the 2 countries.