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

JGBS AUCTION: The Japanese Ministry of Finance (MOF) will today sell Y800bln of

0.80% 30-Year bonds, a reopening of issue #57.

- The MOF last sold 30-Year bonds on December 7 2017, the auction drew an

average yield of 0.848% at 98.84, a high yield of 0.850% at 98.80, covered

4.377x (the highest since May 2014).

- The long end firmed despite the 30-Year auction today, demand is expected to

be strong for the issue with sources noting real money accounts. especially life

insurers, likely to have heavy takedown as they did at the 40-Year auction last

week. The 30-Year sector is slightly richer on the curve than the previous

auction, but yields at these levels are still expected to attract strong bids. 

- After the BoJ reduced 10-25 and 25+ Year JGB purchases on January 9 there was

some trepidation that further reductions could be on the cards, but a stronger

yen has served to discourage this theory. 

- Slightly wider USD/JPY basis swaps should also serve to support demand at the

auction as FX hedged UST yields continue to erode. Results due at

0345GMT/1245JST (MOF also sell 3-Month bills as 0335GMT/1235JST)