PREVIEW: The Japanese MOF will today...>

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

opening JB#167.

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

3.443x at an average yield of 0.543%, average price of 102.80, high yield of

0.545%, low price of 102.75, with 65.7187% of bids allotted at the high yield.

- 20-Year benchmark JGB yields have operated in a ~12.5bp range in the time

since the most recent auction, hitting the lowest level observed since November

2016 in the process, as market volatility drove investors into safe havens

around the new year period, although risk assets have regained some poise in the

time since. Yields last trade ~2.5bp off the recent low at 0.456%.

- 20-Year paper looks rich in its own right vs. swaps. Current 20s looks

relatively attractive vs. 10s & 30s Z-spread & ASW terms, although 10s offer a

slightly more attractive carry and roll proposition. Also worth noting that the

10-/20-Year curve sits at multi-month flats.

- FY-end "window dressing" may begin to creep in to the JGB space.

- Results due at 0335GMT/1235JST.