The Japanese Ministry of Finance.......>

JGBS AUCTION: The Japanese Ministry of Finance (MOF) will today sell Y500bln of

0.9% 40-Year JGB's, a reopening of issue #10.

- The MOF last sold 40-Year debt on September 26. The auction drew a high yield

of 1.015% at 96.27 with 1.4525% of bids allotted at the high yield. The sale was

covered 3.24x. 40-Year auctions are allotted on a dutch auction basis.

- Conditions for the sale are mixed, the MoF last week floated their intention

to reduce super long issuance in FY2018, which supported a bid in the sector

early last week. However the sector sold off after the BoJ reduced purchases by

Y10bln to Y90bln in the 25+ Year sector last week.

- At 3.24x covered, demand at the previous auction was the highest since 2015,

demand is likely to slip at this auction. In terms of value the super long end

has richened since the previous sale and spreads have tightened with the 40-Year

yield around 3bp lower, the issue is rich compared to the past 6 months. Some

demand can be expected by large pension fund month end index extensions in

November.

- Results due at 0345GMT/1245JST.