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

JGBS AUCTION: The Japanese Ministry of Finance (MOF) will today sell Y700bln of

30-Year JGB's, representing a reopening of JB58.

- The MOF last sold 30-Year debt on May 15, the auction drew cover of 4.408 at

an average yield of 0.746%, average price of 101.31, a high yield of 0.746%, low

price of 101.30, with 91.8088% allotted at the high yield.

- Benchmark 30-Year yields sit around 4.0bp lower than they did at the time of

the most recent 30-Year auction, although short covering demand is expected to

support the auction this time around as this represents the last re-opening of

JB58, while repo rates have eased a tad recently. Investors have seemingly been

losing their appetite for overseas Bonds, which means that the relatively low

absolute level of 30-Year yields is unlikely to act as a deterrent. The sector

looks cheap on the curve and fair in ASW terms.

- Negatives for the auction include a relative short horizon until the next

round of 30-Year supply, coupled with limited BoJ Rinban operations in between,

with some expecting the BoJ to trim the size of its operations in the super-long

end. Results due at 0435BST/1235JST