PREVIEW: The Japanese MOF will today...>

JGBS AUCTION: PREVIEW: The Japanese MOF will today sell Y2.2tn of 10-Year JGB's,

representing the opening of #JB352. The MOF last sold 10-Year debt on Sep 05,

the auction drew cover of 4.548x at an average yield of 0.113%, average price of

99.87, high yield of 0.114%, low price of 99.86, with 57.5664% allotted at the

high yield. The 10-Year yield has traded in a ~3.5bp range since the most recent

auction, last trading at 0.132%, 0.7bp back from the high of the recent range.

- From a RV perspective the sector trades rich in ASW terms vs. the 20-Year

b'mark, but holds slightly more appeal than 7-Year paper. The same holds true in

z-spread terms. 20-Year paper also offers a more attractive carry & roll prop.

- This auction will draw attention after the BOJ's recent reduction to both the

lower & upper bounds of its 25+ Year JGB purchases for the month of Oct. The

alterations to the BOJ's super-long purchase plan may mean that funds decide to

allocate more capital to 10-Year paper, at least in the short-term. There seems

to be a lack of short covering requirements at the auction, although the lack of

conviction in establishing fresh shorts could prove to be supportive.

- Results due at 0435BST/1235JST.