JGBs are likely to hover in a tight band around unchanged levels ahead of a key 10-year note auction scheduled for Tuesday afternoon. An overnight drop in U.S. Treasury prices is also likely to inject some caution into a super-charged market. "The market is likely to be tethered to a narrow range in the morning," says Tokai Tokyo Securities chief strategist Kazuhiko Sano in a research note. The outcome of the auction is likely to set the tone for the rest of the day, but with the coupon expected to be set very low, demand for new bonds is by no means certain, he adds. Lead June futures are tipped in a 143.57-143.82 band vs 143.79 at Monday's close, while the yield on the 10-year note is tipped in a 0.810%-0.835% band vs 0.815%.
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