JGBS AUCTION: The Japanese Ministry....>

JGBS AUCTION: JGBS AUCTION: The Japanese Ministry of Finance (MOF) will today

sell Y2.1tln of 0.10% 2-Year JGB's, the auction represents the opening of the

#JN387 line.

- The MOF last sold 2-Year debt on Feb 27, the auction drew cover of 5.837 at a

yield of -0.160% at 100.522, a high yield of -0.159% at 100.520, with 62.3573%

allotted at the high yield.

- A mild degree of concession was noted in shorter dated Japanese paper on

Wednesday, with the sector softening further this morning heading in to quarter

end.

- From a relative value perspective, the on the run 2-Year doesn't appear rich

against longer dated paper, but trades at a high premium to shorter dated lines.

International demand may also be limited as the zone is not attractive on a

cross-currency swap basis swap front at present. With questions hanging over

both foreign & domestic demand, the outlook for this auction is questionable.

- Results due at 0445GMT/1245JST.