PREVIEW: 5-Year Supply Due

The Japanese MOF will today sell Y2.5tn of 5-Year JGB's re-opening JB#147. The MOF last sold 5-Year debt on May 19, the auction drew cover of 3.300x at an average yield of -0.097%, average price of 100.50, high yield of -0.093%, low price of 100.48, with 94.3092% of bids allotted at the high yield.

• Outright 5-Year yields sit ~1.5bp above the prevailing levels witnessed at last month's auction.
• The 2-/5-/10-Year butterfly sits closer to the bottom end of its recent range, bucking the trend seen across some of the major global FI curves where the belly has struggled.
• 5-Year swap spreads hover around the middle of their recent range.
• Still, the BoJ's continued presence in the space and this week's ~Y8tn redemption from a maturing JGB line should provide enough cushion to provide at least an underlying level of demand.
• Results due at 0435BST/1235JST.