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

JGBS AUCTION: The Japanese Ministry of Finance (MOF) will today sell Y1.0tn of
20-Year JGB's, representing a re-opening of JB165. The MOF last sold 20-Year
debt on July 12, the auction drew cover of 4.537x at an average yield of 0.492%,
average price of 100.13, high yield of 0.494%, low price of 100.10, with
63.8373% allotted at the high yield.
- Outright 20-Year yields have operated in ~16bp range since the most recent
auction, with JGBs experiencing heightened vol. after the BOJ adopted a more
flexible approach to its 10-Year yield target, as Kuroda pointed to a band of
-/+0.2% for 10-Year yields & the curve steepening as a result, although
volatility has cooled in recent sessions, allowing benchmark 20-Year yields to
settle and last trade at ~0.620%. It is worth noting that the most recent
30-Year auction (on 09 Aug) passed smoothly, with similar expectations this time
around. Japanese lifer Fukoku Mutual has urged the BOJ not to worry about the
recent uptick in JGB yields, stressing that 1.0% yields in the 30-Year zone
would trigger demand from the sector.
- Results due at 0435BST/1235JST.
MNI London Bureau | +44 0203-865-3809 |
MNI London Bureau | +44 0203-865-3809 |

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