PREVIEW: The Japanese MOF will today...>

JGBS AUCTION: PREVIEW: The Japanese MOF will today sell Y1.9tn of 5-Year JGB's

re-opening JB#142. The MOF last sold 5-Year debt on January 15, the auction drew

cover of 4.481x at an average yield of -0.087%, average price of 100.93, high

yield of -0.087%, low price of 100.93, with 90.2740% of bids allotted at the

high yield.

- Outright, 5-Year yields sit around the middle of their YtD range, last

-0.140%, a little richer than levels seen at the prev. auction. 5-Year swap

spreads sit at the bottom of the recent range, while the 2-/5-/10-Year butterfly

sits around the middle of its recent range. Yesterday's worse than exp. prelim

Q4 GDP print (in the wake of the sales tax hike & well documented natural

disasters, and a dip in biz investment), coupled with the ongoing uncertainty

surrounding Coronavirus should provide at least an underlying amount of support

at today's auction. A couple of desk reports have also pointed to notable short

covering needs for 5s among dealers. The BoJ is unlikely to alter purchase sizes

in the Rinban bucket that covers the tenor as it looks to steepen the curve.

- Results due at 0335GMT/1235JST