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The Maintenance Items Needed for a New (old) Bike document from the ST-Owners forum says:

Check the rear shock preload adjuster.

While not described in the Honda Service Manual, the preload adjuster is most likely low on fluid and is not working properly. After unscrewing the knob all the way, if resistance is not felt within two clicks, fluid needs to be added. This is discussed in several threads.

Preload

Rebound and damping

More about tuning the rear suspension.