The space turned bid shortly after the open,...>

JGBS: The space turned bid shortly after the open, following the initial move

lower, as futures reclaimed 150.00, 10-Year yields finished the morning session

0.2bp softer at 0.126%.

- There was limited to no reaction in JGBs on the back of comments from BOJ

Deputy Gov. Amamiya, noting that he doesn't expect JGB yields to ratchet higher

and that the recent tweaks to the BOJ's MonPol do not represent a reduction to

the level of easing employed by the Bank. Amamiya also noted that there is a

limit to the amount that banks can lower interest rates.

- Focus falls on today's 10-Year JGB supply, although heightened vol. in recent

sessions makes it hard to assess the prospects of the upcoming auction, with

10-Year yields still well shy of the upper band of the newly permitted range

(0.20%) dealers will likely adopt a cautious approach.

- Looking at the bigger picture, Daiwa believe that "10-Year JGBs should find

good demand at yields of 0.15-0.20%, at least until the next BOJ MPM is held on

September 18-19."