PREVIEW: 20-Year Supply Due

The Japanese MOF will today sell Y1.2tn of 20-Year JGB's re-opening JB#175. The MOF last sold 20-Year debt on February 18, the auction drew cover of 3.127x at an average yield of 0.482%, average price of 100.31, high yield of 0.488%, low price of 100.20, with 47.0278% of bids allotted at the high yield.

• Proximity to and speculation surrounding next week's BoJ monetary policy decision (and release of the Bank's monetary policy review) may defer participation, while some participants may opt to keep their powder dry for a fresh round of issuance in offshore bonds around the turn of the Japanese FY (we have previously flagged the allure of Australian & U.S. Tsys in FX-hedged yield terms for Japanese investors, and the recent stabilisation of broader FI markets and turn of the FY may provide a catalyst for demand for foreign paper).
• The 10-/20-/30-Year butterfly sits a little shy of the recent multi month highs (cheaps for 20s), with some desks noting a lack of demand for carry resulting in 20/30-Year curve flattening given the uncertainty surrounding the upcoming BoJ monetary policy review, while questions also continue to circle re: the potential for decreased transparency re: the scheduling of BoJ Rinban operations.
• Results due at 0335GMT/1235JST.