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

JGBS AUCTION
JGBS AUCTION: The Japanese Ministry of Finance (MOF) will today sell Y2.2tln
0.10% 5-Year notes, the first sale of issue #134/
- The MOF last sold 5-Year debt on November 14, the sale drew an average yield
of -0.107% at 101.01, a high yield of -0.105% at 101.00, the sale was covered
4.19x.
- The on the run 5-Year issue (currently #133) yields -0.110%. Expectations for
the sale are mixed, these yield levels are similar to the previous auction and
there is some expectation that issuance in the sector could be reduced in 2018
which should be supportive of demand.
- However, there has been recent speculation that the BoJ are considering
changing the target of their YCC programme and steepening the yield curve,
potentially bringing the 5-Year yield out of negative territory. The BoJ O/N
unsecured call rate has risen from -0.55% to -0.36% so far in October which
suggests liquidity could be tighter and could impact demand.
- Results due at 0345GMT/1245JST

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