PREVIEW: The Japanese Ministry of......>

JGBS AUCTION: PREVIEW: 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#1-10, #16-60 & #150-166 will be on offer.

- The previous enhanced liquidity auction covering these maturities was held on

December 6. The auction saw Y500bn offered and was covered 2.089x at an average

spread of -0.005%, and a high spread of 0.000% with 40.4643% of the bids

allotted at the high spread. The takedown was dominated by 20-Year JB#150, which

accounted for ~Y270bn of the total issuance.

- Market volatility, dovish central banks across the globe & worry surrounding

the economy have led to a flatter JGB curve & lower yields across the board. The

BoJ had to trim the size of its 10-25 Year JGB purchases earlier this month,

which has triggered speculation of additional tweaks to Rinban ops. That hasn't

stopped the latest round of longer dated auctions from coming in on the firm

side, with many suggesting that lifers have found themselves underweight

super-long JGBs as we head towards FY end.

- Results due at 0335GMT/1235JST.