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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#150. The MOF last sold 5-Year debt on December 9, the auction drew cover of 3.626x at an average yield of -0.086%, average price of 100.44, high yield of -0.084%, low price of 100.43, with 85.6453% of bids allotted at the high yield.

  • •The allure of new paper, coupled with fresh multi-month highs in yields terms should underpin demand at today’s 5-Year auction, especially given the stabilisation witnessed in the space during the Tokyo morning.
  • •Relative value optics aren’t quite as appealing, with the likes of the 2-/5-/10-Year JGB butterfly operating around the middle of the recently observed range. Still, some may use the auction to fade the recently observed, albeit rangebound, round of steepening on the 2-/5-Year curve.
  • •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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