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

JGBS AUCTION: The Japanese Ministry of Finance (MOF) will today sell Y500bln of

0.90% 40-Year JGB's.

- The MOF last sold 40-Year debt on Jan 12, the auction drew cover of 3.674 at a

yield of 0.985% at 97.24. - Dealers seemingly have short covering needs for the

upcoming supply, but the auction does not look attractive in terms of yield.

Super-long paper has outperformed in the time since the most recent auction, as

the curve has bull flattened. Outright 40-Year JGB yields have fallen by circa

9bp, with benchmark 40-Year paper last yield 0.895%.

- The decline in the JPY has suppressed yields in the super-long end, despite 2

reductions from the BoJ in terms of the size of super-long paper that it offers

to buy in its Rinban operations during 2018.

- FY demand for super-long paper was seemingly front loaded this year, although

most expect the favourable supply-demand backdrop to continue in FY18, with the

strength of the JPY seemingly limiting the BoJ's option in terms of reducing its

purchases. - Results due at 0445GMT/1245JST.