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

JGBS AUCTION: The Japanese Ministry of Finance (MOF) will today auction Y400bln

of 0.10% 10-Year inflation linked JGB's, which will open a new issue #23.

10-Year JGBis were last auctioned on February 06 2018, the auction drew cover of

3.382x at a high yield of -0.464%, at a low price of 105.35, with 5.0000%

allotted at the high yield.

- The prior auction went poorly and 10-Year BEI's sit around 1bp higher (at

56.6bp) than they closed at on the day of that particular supply, supported by

the rise in oil prices and a softer JPY, after topping out at 61.0bp in late

April. Supply & demand conditions appear tight in the inflation linked zone,

with the BoJ's Rinban & MoF buybacks expected to equate to ~Y200bln worth of the

outstanding JGBis between today and the next auction (scheduled for August).

- The CPI outlook in Japan remains muted. Barclays estimate a fair level at

auction time of JGBi22+0.0bp, and suggest that "given the outlook for seasonally

positive carry, we look for BEI to rise over the short term after the auction,

as usual, and believe there will be dealing interest around 55bp. We see upside

for JGBis over the short term." Results due at 0435GMT/1235JST.