PREVIEW: Liquidity Enhancement Auction For 15.5-39 Year JGBs Due

The Japanese Ministry of Finance (MOF) will today sell Y500bn of JGBs with 15.5-39 Years until maturity in a liquidity enhancement auction. JB#1-14, #28-73 & #163-179 will be on offer.

• The previous enhanced liquidity auction covering these maturities was held on February 10. The auction saw Y499.8bn issued and was covered 2.012x at an average spread of +0.016%, and a high spread of +0.029%, with 65.1006% of the bids allotted at the high spread.
• February’s auction saw JB#49-50 & JB#52-53 account for a cumulative ~Y115bn of the allotment, while JB#13 accounted for Y77.2bn of the takedown, the largest allotment of an individual line.
• The steepness of the domestic curve should result in a solid auction, although ongoing market vol., the wider inflation spectre, worry re: foreign central bank normalisation and a lack of relative BoJ control over this zone of the curve will likely prevent the auction from being as strong as it could be.
• Results due at 0435BST/1235JST.