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

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

5-Year JGB's, representing the opening of JB136.

- The MOF last sold 5-Year debt on June 21, the auction drew cover of 3.877x at

an average yield of -0.113%, average price of 101.02, a high yield of -0.109%,

low price of 101.00, with 61.1594% allotted at the high yield.

- Benchmark 5-Year JGBs have operated in a ~2bprange since the latest auction.

- There appears to be a mild degree of concern ahead of the auction owing to the

flatness of the 2-/5-Year yield differential, although the fact that the auction

represents the opening of a fresh JGB line should provide some support.

- The sector also looks relatively unattractive, with the belly of the curve

looking a little rich.

- Results due at 0435BST/1235JST