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Latest Liquidity Enhancement Auction Goes Well

JGBS

Spreads tighten and the cover ratio jumps at the latest liquidity auction covering off-the-run 1- to 5-Year JGBs. Offshore participants perhaps took advantage of x-ccy basis swap related yield pickups, while domestic names may have looked to the BoJ’s on hold stance and relative stability of this area of the curve to park any excess cash, given continued market volatility and elevated FX-hedging costs, which renders many offshore bond investments unviable.

MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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