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

JGBS AUCTION: The Japanese Ministry of Finance (MOF) will today sell Y2.0tln of

0.1% 5-Year JGB's.

- The MOF last sold 5-Year debt on March 13, the auction drew cover of 4.182 at

an average yield of -0.1080%, average price of 101.05, a high yield of -01060%,

low price of 101.04, with 67.4216% allotted at the high yield.

- Benchmark 5-Year yields sit at similar levels to those seen at the time of

March's auction. This should bode well for the supply following the decent

take-up last time out, alongside the elevated rise in USD hedging costs, which

may be at least part of the reason behind Japanese investors selling Tsys in

February, as captured in the latest TIC flow data, which should divert some

Japanese investors towards domestic paper.

- Barclays suggest that "the JGB market could be biased toward a correction this

morning ahead of the 5-Year JGB auction after overseas rates showed little

movement overnight. We expect the auction to clear without a hitch given that

current yields are near the average at the last auction."

- Results due at 0445BST/1245JST.