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PREVIEW: The Japanese MOF will today...>

AUSSIE BONDS: PREVIEW: The Japanese MOF will today sell Y700bn of 30-Year JGB's.
- The MOF last sold 30-Year debt on October 11, the auction drew cover of 3.919x
at an average yield of 0.898%, average price of 100.04, high yield of 0.900%,
low price of 100.00, with 69.4027% allotted at the high yield.
- The benchmark 30-Year yield has traded in a ~8bp range since the most recent
auction, last trading at 0.885%, near the middle of that range.
- 20-Year paper looks a little more attractive than 30-Year based on ASW &
z-spread perspectives, while 20-Year paper also offers a more attractive carry &
roll proposition.
- The recent round of domestic lifer/pension fund asset allocation plans
indicated a general willingness to buy 30-Year JGBs if yields reach 1%. The
sector's yields have become competitive with French 10-Year OATs on an FX hedged
basis for Japanese investors, although the huge funds have indicated a
willingness to pursue larger uncovered bond holdings.
- Results due at 0335GMT/1235JST.
MNI London Bureau | +44 0203-865-3809 |