PREVIEW: The Japanese MOF will today...>

JGBS AUCTION: PREVIEW: The Japanese MOF will today sell Y2.0tn of 2-Year JGB's

opening JB#407. The MOF last sold 2-Year debt on October 29, the auction drew

cover of 4.811x at an average yield of -0.208%, average price of 100.620, high

yield of -0.208%, low price of 100.620, with 82.9210% of bids allotted at the

high yield.

- 2-Year JGBs currently yield -0.186%, ~3.0bp more than they did at the time of

the previous auction, although the BoJ's willingness to promote curve steepening

and steady increase of 1-3 Year JGB purchases over the last year or so probably

limits the upward impetus in yields, even with the BoJ set to sit on the

sidelines re: broader MonPol and wait for well discussed global developments to

play out, with an eye on the feed through from fiscal stimulus at home.

- The 2-5 Year JGB curve has edged back from recent steeps, sitting 5.0bp off

the cycle low, and is of course still very flat on a historical basis.

- Results due at 0335GMT/1235JST