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PREVIEW: The Japanese MOF will today...>

JGBS AUCTION: PREVIEW: The Japanese MOF will today sell Y900bn of 20-Year JGB's
re-opening JB#171. The MOF last sold 20-Year debt on February 20, the auction
drew cover of 3.985x at an average yield of 0.232%, average price of 101.27,
high yield of 0.234%, low price of 101.25, with 81.9560% of bids allotted at the
high yield.
- Line last yields 0.254%, 10bp or so off the recent lows, with concession ahead
of today's supply providing a little bit of cheapening over the past couple
sessions, in lieu of some weak JGB auctions over the last week or so. That being
said, the 20-Year zone has a broader base of investors vs. longer dated
alternatives, which may support demand on the back of relatively light
positioning (per desk reports) and lower secondary market liquidity. Although,
the BoJ's desire for a steeper curve may provide some counter, in addition to
the broader round of uncertainty/volatility, which is the real wildcard.
- 20-Year ASW spreads sit around recent wides.
- The 10-/20-/30-Year fly sits in the upper end of its YtD range.
- Results due at 0335GMT/1235JST.
MNI London Bureau | +44 0203-865-3809 |
MNI London Bureau | +44 0203-865-3809 |

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