Japan 10-Year JGB Auction Weaker; Tail Widens; Futures Sold

     TOKYO (MNI) - The results of the new 10-year Japanese government bonds

auctioned Tuesday came in slightly weaker than expected, sending September

10-year bond futures lower.

     September bond futures fell to 151.16 from 151.20 just before the results

were released. At midday, the futures contract had ended down 0.01 from Monday's

close of 151.21.

     The tail stemming from the gap of between the average and accepted lowest

prices widened to 0.05 from 0.01 at the previous auction in August. A smaller

number means that investors' demand for the bonds is stronger.

     Investors refrained from actively buying the new bonds at the auction

following the recent drop in bond yields.

     The Ministry of Finance sold Y1.8651 trillion of the 10-year bonds, with

the lowest accepted price of 100.83, lower than a range of 100.85 to 100.87

expected by market players.

     The new issue carries a coupon of 0.1%, unchanged from that for the current

10-year bonds.

     Bids totaled Y7.3695, making the bid-to-cover ratio 3.95, down from 4.21 at

the previous similar auction in August.

--MNI Tokyo Bureau; tel: +81 90-2175-0040; email: hiroshi.inoue@marketnews.com

--MNI Tokyo Bureau; tel: +81 90-4670-5309; email: max.sato@marketnews.com

[TOPICS: M$A$$$,M$J$$$,M$$FI$,MN$FI$]