PREVIEW: The Japanese MOF will today...>

JGBS AUCTION: PREVIEW: The Japanese MOF will today sell Y400bn of 40-Year JGB's,

representing the final re-opening of JB#11. The MOF last sold 40-Year debt on

January 29 2019, the auction drew cover of 3.786x at a high yield of 0.740%, low

price of 102.04, with 10.2272% of bids allotted at the high yield. 40-Year

benchmark JGB yields have operated in a ~20bp range in the time since the most

recent auction, with dovish pivots from a swathe of central banks & worry

surrounding the health of the global economy driving demand for G10 paper.

40-Year yields trade ~3.0bp off the recent cycle low (which coincided with the

lowest levels observed since '16). FY-end "window dressing" has likely added a

further layer of demand to the recent bid for long-end JGBs. Daiwa suggest that

short covering demand may provide support at today's auction.

- Looking at the shape of the JGB curve, the 30-/40-Year spread sits around the

flattest levels observed since 2016, with the same holding true for the

5-/40-Year spread.

- The line holds little in the way of appeal on either ASW or Z-spread terms.

- Results due at 0335GMT/1235JST.