PREVIEW: The Japanese MOF will today...>

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

re-opening JB#170. The MOF last sold 20-Year debt on November 20, the auction

drew cover of 4.207x at an average yield of 0.266%, average price of 100.63,

high yield of 0.268%, low price of 100.60, with 43.6701% of bids allotted at the

high yield.

- 20-Year yields have been confined to a ~0.24-0.32% range since the most recent

20-Year auction, last 0.296%, ~27bp or so off the YtD low, but still suppressed

on a longer dated basis. Recent developments on the trade war and Brexit fronts

have alleviated some of the global risk headwinds, at least in the short term.

- Several desks highlight short covering requirements, which could support

demand, although year-end liquidity matters may provide headwinds. Elsewhere, a

broader investor base vs. 30- & 40-Year paper, added to arguably lower impact

from BoJ MonPol vs. 10s, coupled with 3-month flats in 20-/30-Year & 20-/40-Year

spreads, could provide support. Upcoming JGB redemptions may also support

takedown. 20-Year ASW spreads trade near the top of their 12-Month ranges.

- Results due at 0335GMT/1235JST