PREVIEW: The Japanese MOF will today...>

JGBS AUCTION: PREVIEW: The Japanese MOF will today sell Y700bn of 30-Year JGB's,

representing the opening of JB#63. The MOF last sold 30-Year debt on June 13,

the auction drew cover of 3.473x at an average yield of 0.319%, average price of

104.92, high yield of 0.349%, low price of 104.05, with 73.828% of bids allotted

at the high yield. The auction was weak, with a wide tail & short covering

evident ahead of supply. Benchmark 30-Year yields sit ~3.5bp above the levels

observed ahead of that auction & ~9bp off the cycle low. The decline in global

yields should be supportive for this auction. 30-Year ASW spreads have moved

back from recent lows & sit in the middle of their recent range. The 20-/30-/40

Year fly operates ~4bp off its June low, but still sits in the lower half of its

recent range. 20-Year paper offers a more attractive carry & roll prop.

- The BoJ left the parameters of its 25+ Year Rinban unch. for the month of

July, although it has tweaked purchase bands & purchase sizes across the bulk of

the curve to try & manufacture a steeper curve. Participants have not played

ball & are well aware of the "stock effects" of Rinban.

- Results due at 0435BST/1235JST.