PREVIEW: The Japanese MOF will today...>

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

re-opening #JB171. The MOF last sold 20-Year debt on January 17, the auction

drew cover of 3.828x at an avg yield of 0.300%, avg price of 99.99, high yield

of 0.305%, low price of 99.90, with 93.4722% of bids allotted at the high yield.

- 20-Year yields have operated in a ~12bp range since the most recent auction,

and sit towards the richer end of that range, last 0.245%, even after the BoJ

reduced the # of 10-25 Year Rinban ops per month for Feb as it looks to steepen

the curve. Coronavirus & domestic econ worry has dominated price action for the

space, with questions re: the BoJ's scope for further easing apparent.

- Desks point to relatively strong short covering needs at auction, which should

aid demand, alongside an investor base that is broader than 30- and 40-Year

counterparts. Worth remembering that this line is not included in BoJ Rinban ops

at present. Eyes on end of FY repatriation may also support the auction.

- 20-Year ASW spread sits at highs of the recent range, 10-/20-/30-Year fly

around middle of YtD range, but still low from a historical perspective.

- Results due at 0335GMT/1235JST.