Free Trial
SNAPSHOT

Set For A Divided Congress

BUND TECHS

(Z2) Remains Vulnerable

MNI EXCLUSIVE

China Must Lift Growth To Curb Capital Outflow

ASIA FX

Divergence With CNH Persists

Real-time Actionable Insight

Get the latest on Central Bank Policy and FX & FI Markets to help inform both your strategic and tactical decision-making.

Free Access

PREVIEW 40-Year JGB Supply Due

JGBS AUCTION

The Japanese MOF will today sell Y700bn of 40-Year JGBs re-opening JB#15. The MOF last sold 40-Year debt on July 26, with the auction drawing cover of 2.705x at a high yield of 1.345%, low price of 89.43 and 40.0584% of bids allotted at the high yield.

  • The recent shunt higher in yields across core global fixed income markets, whether derived through terminal rate pricing surrounding the world’s major central banks or worry surrounding UK fiscal policy, has filtered through to the super-long end of the JGB curve, where the BoJ has less relative control, given the structure of its YCC mechanism.
  • This leaves the 10-/40-Year curve at multi-year steeps into supply, with fresh concession seen this morning, perhaps on auction demand-related worry.
  • The ultimate question is whether or not the move to fresh cycle cheaps for 40s, in an outright sense, and vs. the likes of 10s on the curve, will be enough to draw the domestic pension and life insurer community off the sidelines (Some have already expressed caution when deploying capital into longer dated JGBs given recent market dynamics).
  • Ongoing market volatility and the recent repricing is not the best recipe for duration demand.
  • Results are due at 0435BST/1235 JST.
203 words

To read the full story

Why Subscribe to

MarketNews.com

MNI is the leading provider

of news and intelligence specifically for the Global Foreign Exchange and Fixed Income Markets, providing timely, relevant, and critical insight for market professionals and those who want to make informed investment decisions. We offer not simply news, but news analysis, linking breaking news to the effects on capital markets. Our exclusive information and intelligence moves markets.

Our credibility

for delivering mission-critical information has been built over three decades. The quality and experience of MNI's team of analysts and reporters across America, Asia and Europe truly sets us apart. Our Markets team includes former fixed-income specialists, currency traders, economists and strategists, who are able to combine expertise on macro economics, financial markets, and political risk to give a comprehensive and holistic insight on global markets.

The Japanese MOF will today sell Y700bn of 40-Year JGBs re-opening JB#15. The MOF last sold 40-Year debt on July 26, with the auction drawing cover of 2.705x at a high yield of 1.345%, low price of 89.43 and 40.0584% of bids allotted at the high yield.

  • The recent shunt higher in yields across core global fixed income markets, whether derived through terminal rate pricing surrounding the world’s major central banks or worry surrounding UK fiscal policy, has filtered through to the super-long end of the JGB curve, where the BoJ has less relative control, given the structure of its YCC mechanism.
  • This leaves the 10-/40-Year curve at multi-year steeps into supply, with fresh concession seen this morning, perhaps on auction demand-related worry.
  • The ultimate question is whether or not the move to fresh cycle cheaps for 40s, in an outright sense, and vs. the likes of 10s on the curve, will be enough to draw the domestic pension and life insurer community off the sidelines (Some have already expressed caution when deploying capital into longer dated JGBs given recent market dynamics).
  • Ongoing market volatility and the recent repricing is not the best recipe for duration demand.
  • Results are due at 0435BST/1235 JST.