PREVIEW: The Japanese MOF will today...>

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

- The MOF last sold 10-Year debt on October 02, the auction drew cover of 4.209x

at an average yield of 0.141%, average price of 99.59, high yield of 0.142%, low

price of 99.58, with 47.4678% allotted at the high yield.

- The benchmark 10-Year yield has traded in a ~6bp range since the most recent

auction, last trading at 0.140%, near the middle of that range, and well shy of

0.2%, the upper limit of the BoJ's imposed trading band. 

- The latest tweak to Rinban operations didn't cover 5-10 Year paper, and the

BoJ will continue to buy JGBs in that bucket on the day that follows 5- &

10-Year JGB supply, although it will not be doing the same across all remaining

tenors, in a bid to support market liquidity by removing the "BoJ trade."

- 10-Year paper looks attractive against 7-Year in ASW terms, but looks rich vs.

longer dated 20- & 30-Year, the same holds true on a z-spread basis.

- Short covering demand may prove to be supportive.

- Results due at 0335GMT/1235JST.