The Japanese MOF will today sell.......>

JGBS AUCTION: The Japanese MOF will today sell Y2.2tn of 10-Year JGB's. The MOF

last sold 10-Year debt on August 02, the auction drew cover of 4.174x at an

average yield of 0.126%, average price of 99.74, high yield of 0.138%, low price

of 99.62, with 48.9994% allotted at the high yield. The 10-Year yield has traded

in a ~6.0bp range since the most recent auction, settling back towards 0.10%,

following the BOJ inspired vol., last at 0.123%, ~2.0bp off of the recent high.

- The latest monthly Rinban plan saw the BOJ trim the quantity of its 5-10 Year

ops to 5 (prev. 6), but the BOJ upped the upper limit of the range of JGBs it

can purchase in the sector. The same can be said for the 1-5 Year buckets, with

the first operations of the month seeing an increase in the purchase size of 1-5

Year paper, suggesting that the adjustment was owing to calendar issues i.e.

less eligible days for Rinban ops in Sep.

- On a RV basis the sector looks fair in ASW terms, while the 7-Year benchmark

offers a more attractive carry & roll proposition. The 2-/5-/10-Year fly sits in

the middle of its 3-Month range, while the 5-/10-/30-Year fly sits in the lower

third of its 3-Month range. Results due at 0435BST/1235JST.