PREVIEW: The Japanese MOF will today...>

JGBS AUCTION: PREVIEW: The Japanese MOF will today sell Y2.0tn of 5-Year JGB's,

representing the opening of #JB137.

- The MOF last sold 5-Year debt on September 13, the auction drew cover of

5.534x at an average yield of -0.071%, average price of 100.82, high yield of

-0.069%, low price of 100.81, with 10.5496% allotted at the high yield.

- The benchmark 5-Year yield has traded in a ~2.5bp range since the most recent

auction, last trading at -0.065%.

- Short covering requirements may support demand at today's auction, which may

be exacerbated by the lack of natural investors compared to the longer end of

the curve.

- 5-Year paper looks cheap vs. the nearby 3-Year sector in outright yield spread

terms, although the z-spread method is a little less compelling, but still

provides a slightly favourable valuation vs. 7s, the same holds true for ASW

terms.

- Results due at 0435BST/1235JST.