The Japanese MOF will today sell Y250bn of 10-Year JGBis, re-opening JB#27. The MOF last sold 10-Year JGBis on May 16, the auction drew cover of 3.618x at a high yield of -0.715%, and low price of 107.60, with 53.6842% of bids allotted at the high yield.
- The recent narrowing of breakevens (this morning saw 10-Year BEIs hit the narrowest level observed since early April) may result in an uptick in demand given the pronounced worry surrounded an elongated global inflationary impulse (albeit with that experience being much more modest in Japan) and a better entry point for protection against such an outcome.
- Still, the BoJ ultimately expects inflation to moderate over the medium term, given the cost-push nature of the recent uptick and lack of meaningful wage growth.
- Results due at 0435BST/1235JST.