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PREVIEW - 40-Year JGB Auction Due

JGBS AUCTION
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The Japanese Ministry of Finance (MoF) will today sell Y700bn of 40-Year JGBs. The MoF last sold 40-year debt on 27 March 2024, the auction drew cover of 2.487x at a high yield of 1.905%, a low price of 83.41, with 47.4137% of bids allotted at the high yield.

  • The late March auction of 40-year JGBs received a strong reception, with the actual high yield falling below dealer expectations. This positive outcome was further highlighted by an increase in the cover ratio, which rose to 2.487x from the 2.148x seen in the late January auction. Notably, January's cover ratio was the lowest for a 40-year auction since March 2022.
  • Today’s supply follows mixed demand metrics at the 20- and 30-year JGB auctions held in May. The 20-year supply experienced an increase in the cover ratio and a shorter auction tail, whereas the 30-year auction saw the opposite.
  • Currently, the 40-year auction yield is approximately 60bps higher than in late March, reaching the highest level since 2008. Additionally, the 20/40 yield curve is at a cycle high of 70bps.
  • Results are due at 0435 BST / 1235 JST.
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The Japanese Ministry of Finance (MoF) will today sell Y700bn of 40-Year JGBs. The MoF last sold 40-year debt on 27 March 2024, the auction drew cover of 2.487x at a high yield of 1.905%, a low price of 83.41, with 47.4137% of bids allotted at the high yield.

  • The late March auction of 40-year JGBs received a strong reception, with the actual high yield falling below dealer expectations. This positive outcome was further highlighted by an increase in the cover ratio, which rose to 2.487x from the 2.148x seen in the late January auction. Notably, January's cover ratio was the lowest for a 40-year auction since March 2022.
  • Today’s supply follows mixed demand metrics at the 20- and 30-year JGB auctions held in May. The 20-year supply experienced an increase in the cover ratio and a shorter auction tail, whereas the 30-year auction saw the opposite.
  • Currently, the 40-year auction yield is approximately 60bps higher than in late March, reaching the highest level since 2008. Additionally, the 20/40 yield curve is at a cycle high of 70bps.
  • Results are due at 0435 BST / 1235 JST.