Twist flattening crept into the curve again....>

JGBS: Twist flattening crept into the curve again today, with JGB futures firmer

from the off, while early afternoon trade saw a slight pullback in futures.

These moves likely came on the back of the offer to cover ratios ticking up in

the latest round of shorter dated Rinban operations, as the BoJ left the size of

its 1-5 Year & JGBi purchases unchanged. Offer to cover ratios as follows: 1-3

Year 4.34x (prev. 2.32x), 3-5 Year 3.22x (prev. 3.69x), JGBis 4.68x (prev.

4.46x).

- JGB futures were virtually unmoved on the back of a BBG headline covering

comments from BoJ Governor Kuroda, who noted that the BoJ still has room for big

stimulus, even though the BoJ doesn't believe that the Japanese economy needs

stimulus at present. In all honesty these headlines do not represent anything

new.

- Local data had no major impact on the space today.

- An enhanced liquidity auction for JGBs with 5-15.5 Years until maturity

provides the highlight of tomorrow's docket, with machine tool orders data also

due.