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

JGBS AUCTION: The Japanese Ministry of Finance (MOF) will today sell Y2.1tn of

2-Year JGB's, representing a re-opening of JB391. The MOF last sold 2-Year debt

on July 26, the auction drew cover of 4.375x at an average yield of -0.117%,

average price of 100.437, high yield of -0.112%, low price of 100.425, with

49.9692% allotted at the high yield.

- 2-Year JGB yields have operated in a ~6.0bp range since the most recent

auction, with the BOJ induced JGB-volatility headlining over that time horizon.

Benchmark 2-Year JGB yields last deal around the middle of that range at -0.106%

at the time of writing.

- 2-Year JGBS appear a little more appealing than 3-Year paper on both ASW &

Z-spread terms, although there isn't much in it. Carry and roll is virtually

non-existent in the sector, even when compared to the nearby 3s.

- The space remains supported by the BOJ's Rinban operations, with no

adjustments in the bucket covering the sector since November of last year, as

the BOJ aims to steepen the yield curve.

- Results due at 0435BST/1235JST.