Tepid Demand At 5-Year JGB Supply

5-Year JGB supply sees tepid demand as the low price misses wider dealer expectations (which stood at 100.35, per the BBG dealer survey), while the cover ratio slid to the lowest level seen at a 5-Year auction since June of last year, printing comfortably below the 6-auction average. There was also a price tail at the auction, after last month’s 5-Year offering saw no tail. It would seem that outright richness proved to be more prohibitive for demand than we expected, outweighing the relative cheapening and carry and roll proposition we flagged into supply. 5-Year yields are incrementally higher vs. pre-auction levels, while futures sit a touch above levels seen into the lunch break. Market reaction has been muted.