Tuesday's afternoon session saw futures move...>

JGBS: Tuesday's afternoon session saw futures move to fresh session lows after

edging lower in the morning session. 10-Year paper experienced some modest

underperformance in cash trade. This came after the contract was rejected above

the May/Mar highs in overnight trade, with the breakdown of the latest 20-Year

auction a little softer than its predecessor, even though the low price met exp.

- As a reminder, 20-Year paper looked little rich in Z-spread & ASW terms when

compared to 30-Year paper.

- Little reaction to comments from Japanese FinMin Aso who revealed that Japan

will compile a second additional budget for 2018/19 with focus on mitigating the

effects of the recent natural disasters and the scheduled 2019 sales tax hike.

- Little reaction in the space as BoJ Gov. Kuroda noted that he believes current

MonPol settings will bring about inflation in Japan. Kuroda also noted that the

"possibility of reaching the inflation target in FY2020 is low."

- Focus on Japanese CPI data & BoJ Rinban ops due later this week.