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

JGBS AUCTION
JGBS AUCTION: The Japanese Ministry of Finance (MOF) will today sell Y2.3tln of
10-Year JGB's, issue #350. - The MOF last sold 10-Year debt on February 01, the
auction drew cover of 4.584 at an average yield of 0.088%, average price of
100.11, a high yield of 0.090%, low price of 100.09, with 72.9297% allotted at
the high yield.
- The BoJ upped its purchases of 5-10 Year JGBs on Feb 02 & conducted a fixed
rate purchase operation. Since then 10-Yr yields have eased by around 5bp, this
has left 10-Yr paper looking richer although BofAML suggest the sector looks
fair on the curve, noting that carry & roll for 10-Yr paper has edged higher.
- Nonetheless the curve is still flatter, which has clearly made the BoJ
uncomfortable as it trimmed its super-long (25+-Year) purchases yesterday.
- Headwinds for the auction include sub 0.05% b'mark 10-Yr yields, although the
line should be issued at a discount to b'hmark. It seems likely that an
alteration in settlement cycle will mean that the #350 is auctioned 4 times, as
opposed to the typical 3. It is also worth noting that #350 will not be eligible
for BoJ buying ops before Mar 19. Results due at 0345GMT/1245JST.
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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