PREVIEW: 10-Year Supply Due

The Japanese MOF will today sell Y2.6tn of 10-Year JGB's re-opening JB#360. The MOF last sold 10-Year debt on November 4, the auction drew cover of 4.125x at an average yield of 0.046%, average price of 100.53, high yield of 0.047% low price of 100.52, with 73.1880% of bids allotted at the high yield.

• 10-Year JGB yields have coiled in recent weeks, generally insulated from the broader gyrations in the market, with some suggesting that the BoJ could lift its purchases in this sector of the curve, if pressure becomes evident on the back of the impending supplementary budget announcement.
• The relevant butterflies continue to operate within the confines of their recent ranges, although the carry and roll proposition of 10s and insulated nature of this particular zone of the curve may mean that some look to enter into relative plays around the auction.
• Results due at 0335GMT/1235JST.