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

JGBS AUCTION: The Japanese Ministry of Finance (MOF) will today sell Y2.3tln of

0.10% 10-Year JGB's, a reopening of issue #349.

- The MOF last sold 10-Year debt on Jan 10, the auction drew cover of 3.742 at

an average yield of 0.078% at 100.21, a high yield of 0.079% at 100.20 with

65.55% of bids at the high yield.

- The auction should be taken down smoothly, the BoJ's recent actions

(increasing 3-5 Year purchases on Jan 31) affirms the many dovish signals from

the Bank, supporting the BoJ trade (buying low and selling higher to the BoJ).

There could be some weakness at the auction as rising US yields and tightening

USD/JPY basis swaps dampen demand from offshore investors (the most recent MOF

data showed foreigners net sellers of JGBs for the second week in a row).

- Also supportive of the auction is the fact that the BoJ are committed to

maintaining the yield range for the 10-Year sector in particular, the sector is

good value on the curve within this range. Dealer short covering demand is also

expected to encourage a strong takedown.

- Results due at 0345GMT/1245JST.