Free Trial

PREVIEW: 30-Year JGB Supply Due

JGBS AUCTION

The Japanese MOF will today sell Y900bn of 30-Year JGBs, re-opening JB#77. The MOF last sold 30-Year debt on 11 January 2023, the auction drew cover of 3.105x at an average yield of 1.649%, average price of 99.00, high yield of 1.654%, low price of 98.90, with 38.0180% of bids allotted at the high yield.

  • Outright yield levels should be elevated enough to promote a baseline level of demand at today’s auction, with the recent stabilisation away from cycle cheaps being a product of reduced speculation re: an imminent change in BoJ YCC settings.
  • Relative value constraints are more of a negative, with 30s operating at the richer end of the multi-year range on the 20-/30-/40-Year butterfly, albeit back from cycle extremes.
  • Also note that 20s provide a slightly more attractive carry and roll proposition than 30s. although this of course somewhat skewed by the BoJ’s YCC settings.
  • Continued uncertainty re: the trajectory of BoJ policy in the post-Kuroda era also complicates matters.
  • 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

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.