The space has operated in a confined range,....>

JGBS: The space has operated in a confined range, although futures moved higher

in the afternoon, perhaps aided by a strong 10-Year JGBi auction (highest cover

ratio since mid-'08). JGB futures last trade 1 tick lower at 150.80.

- The cash curve sits a little steeper, with super-long paper underperforming.

- Swaps are running a little tighter against JGBs.

- BoJ Gov Kuroda noted that the risk to inflation lies to the downside, and

wouldn't be drawn to a commitment re: the BoJ achieving its inflation target.

- Japanese lifers bought a net Y1.05tln worth of foreign bonds during April,

according to data released by the MoF. This represents the largest amount of

foreign bond purchases in any April since 2008.

- BoP data revealed that Japanese funds were sellers of US debt in March, to the

tune of Y433.8bln, recording a 6th straight month of net selling, as they

continued to rotate into European paper.