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

JGBS AUCTION: The Japanese Ministry of Finance will today sell Y2.3tln of 0.10%

10-Year notes, the first sale of issue #349.

- The MOF last sold 10-Year debt on November 1, the auction drew an average

yield of 0.062%, at 100.37 with a 0.00 price tail, covered 4.552x, the 2017

average for the 10-Year is 3.98.

- Expectations for the auction are mixed, the current on the run issue yields

0.041% and looks rich on the curve in both nominal level and relative value,

while speculation around a possible tweak of the BoJ's YCC could also impact

demand. 

- However, BoJ Gov Kuroda sought to reassure markets over the past few days.

Last week he said that while the reversal rate could be a useful tool Japan was

not at that point yet, and yesterday he pledged to continue monetary easing.

Also relevant for demand is the 5-10 Year purchase from the JGB tomorrow, MNI

sources note that the new issue usually includes a yield premium, so investors

could bid for new 10's today and sell old 10's to JGB tomorrow.

- Results due at 0345GMT/1245JST.