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PREVIEW: 30-Year JGB Supply Due

JGBS AUCTION

The Japanese MOF will today sell Y900 bn of 30-Year JGBs re-opening JB#73. The MOF last sold 30-Year debt on January 7, the auction drew cover of 3.629x at an average yield of 0.719%, average price of 99.51, high yield of 0.720%, low price of 99.50, with 88.4482% of bids allotted at the high yield.

  • Outright 30-Year JGB yields tagged fresh multi-year highs this week. The subsequent stabilisation in broader risk appetite and several recent BoJ addresses pointing to no imminent shift in YCC policy, coupled with the outright yield dynamic, may bolster demand at today’s auction.
  • Meanwhile, the 5-/30-Year yield curve has moved towards multi-month steeps in recent sessions, which may mean that flattener plays generate interest in the setting of longs at today’s auction.
  • Elsewhere, the 20-/30-/40-Year JGB butterfly operates around the middle of its recently observed range.
  • The above combination of outright and relative value appeal should make for smooth enough absorption of supply.
  • 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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