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PREVIEW: 5-Year JGB Supply Due

JGBS AUCTION

The Japanese MOF will today sell Y2.5tn of 5-Year JGB's, opening JB#146. The MOF last sold 5-Year debt on December 8, the auction drew cover of 3.958x at an average yield of -0.118%, average price of 101.05, high yield of -0.114%, low price of 101.03, with 91.2414% of bids allotted at the high yield.

  • In outright terms 5s haven't threatened to break out of the range that has been in play since mid-September, with the softening of the offer/cover ratio in yesterday's relevant BoJ Rinban ops pointing to little in the way of selling interest, which may boost the optics surrounding the potential for a smooth auction. This is further bolstered by the allure of new paper, the uncertainty caused by the COVID-19 situation in Japan and the continued active Rinban ops pursued by the BoJ in this zone of the curve.
  • There is little to flag in RV terms, with the 2-/5-/10-Year butterfly back in the middle of the recent range, while ASWs also sit in the middle of their 3-month range.
  • 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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