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PREVIEW: The Japanese MOF will today...>

JGBS AUCTION
JGBS AUCTION: PREVIEW: The Japanese MOF will today sell Y1.9tn of 5-Year JGB's
opening JB#140. The MOF last sold 5-Year debt on June 18, the auction drew cover
of 4.510x at an average yield of -0.228%, average price of 101.58, high yield of
-0.226%, low price of 101.57, with 97.7373% of bids allotted at the high yield.
- Outright benchmark 5-Year yields are richer than both 2s and 10s.
- The 2-/5-Year yield spread sits off of recent flats (albeit still at
suppressed levels), while the 5-/10-Year yield spread operates around recent
flats. This leaves the 2-/5-/10-Year fly a couple of bp shy of YtD highs, but
firmly in negative territory.
- BoJ Rinban dynamics should provide less support at the auction, after the Bank
trimmed the size of its 3-5 Year purchases last week.
- The 5-Year ASW spread sits at its recent high (based on a 3-month horizon).
- Results due at 04:35BST/12:35JST
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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