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PREVIEW: 10-Year Supply Due

JGBS AUCTION

The Japanese MOF will today sell Y2.6tn of 10-Year JGB's re-opening JB#361. The MOF last sold 10-Year debt on February 2, the auction drew cover of 3.419x at an average yield of 0.053%, average price of 100.46, high yield of 0.054%, low price of 100.45, with 62.9236% of bids allotted at the high yield.

  • The recent steepening and subsequent stabilisation in JGBS provides potential bidders with a more attractive outright entry point, which could lure those that believe that the BoJ will choose not to adjust the width of its permitted 10-Year JGB yield trading band at the end of its monetary policy review (which is due to be published alongside the March monetary policy decision).
  • Participants may be drawn to 5-/10-Year flatteners, based largely on the same logic surrounding potential outright bidders.
  • Still, that same source of uncertainty may prevent overly aggressive bidding at auction.
  • Results due at 0335GMT/1235JST.
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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