PREVIEW: The Japanese MOF will today...>

JGBS AUCTION: PREVIEW: The Japanese MOF will today sell Y2.1tn of 10-Year JGB's

opening #JB356. The MOF last sold 10-Year debt on September 3, the auction drew

cover of 3.597x at an average yield of -0.265%, average price of 103.68, high

yield of -0.264%, low price of 103.66, with 99.4435% of bids allotted at the

high yield.

- The latest developments re: BoJ Rinban operations, as the BoJ attempts to

steepen the yield curve, may hamper demand at today's auction, even with 10-Year

yields ~11.0bp off the cycle low.

- The fact that the issuance represents the first offering of a new line may

provide some support.

- The fact that 10-Year paper offers the most attractive carry & roll

proposition on the curve may also provide some support ahead of supply.

- The 10-Year ASW spread has rebounded from the recent lows in the early part of

this week.

- The 5-/10-/20-Year fly sits towards the upper end of its recent range.

- Results due at 0435BST/1235JST.