PREVIEW: 30-Year Supply Due

The Japanese MOF will today sell Y900bn of 30-Year JGB's opening #JB70. The MOF last sold 30-Year debt on March 4, the auction drew cover of 2.766x at an average yield of 0.691%, average price of 100.22, high yield of 0.700%, low price of 100.00, with 29.9498% of bids allotted at the high yield.

• Today's 30-Year JGB supply brings about the first test of local demand in the new FY, although demand may be limited as the Japanese investor cohort could be tempted by offshore yields.
• There isn't much in the way of appeal from a relative value perspective for 30s at present, while outright 30-Year yields sit in the middle of the range witnessed since late March.
• If we are looking for silver linings, the clarity provided by the BoJ via its March meeting and subsequent adjustments to its Rinban plan have at least removed some uncertainty from the outlook, while the carry offered by 30s is only a touch less appealing than what is offered by 20s (the most attractive benchmark carry position on the curve).
• Results due at 0435BST/1235JST.