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The Japanese Ministry of Finance (MOF) will....>

JGBS: The Japanese Ministry of Finance (MOF) will today sell Y700bn of 30-Year
JGB's, representing the re-opening of JB59. The MOF last sold 30-Year debt on
July 05, the auction drew cover of 5.008x at an average yield of 0.704%, average
price of 99.90, high yield of 0.706%, low price of 99.85, with 31.2024% allotted
at the high yield. It is worth noting that the most recent auction went
particularly well, with the cover ratio hitting a 6-Year high.
- In outright terms, the benchmark 30-Year yield had operated in a ~20bp range
in the time since the most recent auction, and last sits at cycle highs of
0.873%, the highest level seen since October of last year, of course inspired by
the tweaks to the BOJ's YCC at the back end of July. While the headline yields
seem attractive, the auction will be a test of super-long demand against the
backdrop of the BoJ-induced volatility. The volatility has seemingly discouraged
Japanese life insurers from entering the market, with a focus on where 10-Year
yields will settle. 0.8% is usually viewed as a threshold in the tenor, whereby
life-insurers typically become more active.
- Results due at 0435BST/1235JST.
MNI London Bureau | +44 0203-865-3809 |
MNI London Bureau | +44 0203-865-3809 |

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