PREVIEW: The Japanese MOF will today...>

JGBS AUCTION: PREVIEW: The Japanese MOF will today sell Y900bn of 20-Year JGB's

re-opening #JB168. The MOF last sold 20-Year debt on April 16, the auction drew

cover of 5.102x at an average yield of 0.366%, average price of 100.63, high

yield of 0.367%, low price of 100.60, with 47.1709% of bids allotted at the high

yield.

- Outright 20-Year year yields trade just shy of the middle of the range

observed in the time since the previous auction, last 0.366%.

- The short term supply & demand mix based on BoJ Rinban operations and the

MoF's auction schedule looks favourable (as long as the BoJ doesn't trim the

size of its purchases in the 10-25 Year bucket).

- 20s look a little more attractive in ASW terms than they did at the previous

auction, although the 20-/30-Year ASW spread is little changed. The

10-/20-/30-Year fly sits ~2.5bp off the recent low that was observed around the

time of the previous auction, but still sits closer to the trough of its

12-month range.

- Results due at 0435BST/1235JST