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

JGBS AUCTION: The Japanese Ministry of Finance (MOF) will today sell Y2.2tln of

0.1% 10-Year JGB's.

- The MOF last sold 10-Year debt on May 08, the auction drew cover of 4.205 at

an average yield of 0.046%, average price of 100.53, a high yield of 0.047%, low

price of 100.52, with 91.9407% allotted at the high yield.

- 10-Year yields are <1bp lower (0.051%) than they were heading into the most

recent auction, after trading as low as 0.025% last week before the BoJ caught

markets off-guard and trimmed the size of its 5-10 Year Rinban operations.

- Benchmark 10-Year paper looks ever so slightly expensive in z-spread and ASW

terms, although the sector offers decent enough carry and roll.

- Short covering requirements may also support the auction.

- The fact that yields are back above 0.05% (at the time of writing) should

support supply.