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PREVIEW: 40-Year JGB Supply Due

JGBS AUCTION

The Japanese MOF will today sell Y600bn of 40-Year JGBs re-opening JB#14. The MOF last sold 40-Year debt on January 25, the auction drew cover of 2.574x at a high yield of 0.760%, low price of 97.97, with 39.9532% of bids allotted at the high yield.

  • The outright cheapening (to fresh multi-year cheaps) and curve steepening (which is less impressive given the early ’22 flattening in the likes of the 20-/40-Year & 30-/40-Year yield spreads) may not be enough to generate strong demand, given the lack of relative BoJ control over this area of the curve and continued vol. in wider global core FI markets.
  • Meanwhile, the potential for additional issuance to finance the upcoming fiscal support measures may deter some from bidding.
  • Domestic participants may also be constrained by balance sheet limits ahead of the end of the Japanese FY.
  • Results due at 0435BST/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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