PREVIEW: The Japanese MOF will today...>

JGBS AUCTION: PREVIEW: The Japanese MOF will today sell Y1.0tn of 20-Year JGB's,

re-opening JB#166.

- The MOF last sold 20-Year debt on October 18, the auction drew cover of 4.230x

at an average yield of 0.683%, average price of 100.29, high yield of 0.685%,

low price of 100.25, with 41.8922% allotted at the high yield.

- The benchmark 20-Year yield has traded in a ~8.0bp range in the time since the

most recent auction, last trading at 0.615%, at the bottom of that range.

- 20-Year paper looks a little rich in Z-spread & ASW terms when compared to

30-Year paper. 10-Year paper offers a marginally more attractive carry & roll

proposition at present, although 20-Year paper is much more attractive than

30-Year paper on this perspective. Worth noting that on Monday RTRS sources

involved in the planning said that "Japan's MoF is considering issuing fewer

government bonds with maturities of up to 20 years in the fiscal year from April

2019. Cutting the issuance of 20-year bonds, which are the only maturity for

which no reduction is planned this year, will likely become a priority."

- Results due at 0335GMT/1235JST.