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JGBS AUCTION: PREVIEW - 2-Year JGB Auction Due

JGBS AUCTION
BulletAPACFixed Income BulletsJapanMarkets

The Japanese Ministry of Finance (MoF) will today sell Y2.6tn of 2-Year JGBs. The MoF last sold 2-year debt on 30 September 2024, the auction drew cover of 4.8738x at an average yield of 0.454%, an average price of 100.090, a high yield of 0.457%, a low price of 100.085, with 98.6111% of bids allotted at the high yield.

  • Last month’s 2-year auction demonstrated robust demand, with the low price exceeding dealer expectations and the cover ratio rising to an impressive 4.8738x. Additionally, the auction tail was shorter compared to the previous month, signaling tighter bidding.
  • Today’s auction follows a similarly strong 5-year auction earlier this month.
  • Currently, the 2-year yield stands at its highest level since 2008, trading 10–15bps above last month’s auction levels.
  • The 2/5 yield curve is slightly steeper, while the 2/10 curve has flattened compared to the previous month.
  • Given these dynamics, it remains uncertain whether today’s elevated 2-year yield will be sufficient to attract strong demand in the auction.
  • Results are due at 0335 BST / 1235 JST.
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The Japanese Ministry of Finance (MoF) will today sell Y2.6tn of 2-Year JGBs. The MoF last sold 2-year debt on 30 September 2024, the auction drew cover of 4.8738x at an average yield of 0.454%, an average price of 100.090, a high yield of 0.457%, a low price of 100.085, with 98.6111% of bids allotted at the high yield.

  • Last month’s 2-year auction demonstrated robust demand, with the low price exceeding dealer expectations and the cover ratio rising to an impressive 4.8738x. Additionally, the auction tail was shorter compared to the previous month, signaling tighter bidding.
  • Today’s auction follows a similarly strong 5-year auction earlier this month.
  • Currently, the 2-year yield stands at its highest level since 2008, trading 10–15bps above last month’s auction levels.
  • The 2/5 yield curve is slightly steeper, while the 2/10 curve has flattened compared to the previous month.
  • Given these dynamics, it remains uncertain whether today’s elevated 2-year yield will be sufficient to attract strong demand in the auction.
  • Results are due at 0335 BST / 1235 JST.