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Tepid Demand At Latest 20-Year JGB Auction

JGBS

Tepid demand at the latest 20-Year JGB auction sees the low price match wider expectations (as proxied by the BBG dealer poll), while the cover ratio eased back to sit incrementally below the 6-auction average (which stood at 3.059x). Baseline demand was generated by the outright yield levels and relative value appeal of 20s, although demand was clearly capped, likely on continued uncertainty re: the outlook for BoJ policy and worry re: higher for longer interest rates across the major global central banks (which resulted in domestic investors shedding ultra-long JGBs in January). JGB futures are flat to a touch lower post-auction, while cash 20s are unchanged vs. pre-auction levels.

MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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