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Thursday's 30-Year auction was well............>

JGBS: Thursday's 30-Year auction was well received, as many exp., the
bid-to-cover ratio ticked up to 5.008 (prev. 4.220) & the low price registered
at 99.85 against exp. of 99.75. Super-long paper outperformed on the back of the
results, with bull flattening apparent on the curve.
- BOJ's Masai said that it is appropriate to maintain large-scale monetary
easing because it takes time to achieve the 2% inflation target. But she also
warned against the costs of prolonged easing, saying the BOJ must carefully
watch the developments in economic, price & financial conditions.
- Elsewhere the latest batch of weekly int'l security flow data showed that
foreign purchases of Japanese bonds hit the highest level since early March,
after heavy selling in the prev. week. Domestic lifer demand is already exp. in
the longer end, owing to a perception that the political uncertainty in Europe
will act as a deterrent for lifers in EZ bonds as FX hedged yields now look
unattractive to them.
- BOJ Rinban operations covering the 1-5 & 10-25+ Year sectors and wage data
dominate the domestic docket today.
MNI London Bureau | +44 0203-865-3809 |
MNI London Bureau | +44 0203-865-3809 |

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