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Weak Demand Seen At 2-Year JGB Auction, Lowest Cover Since 2010


The 2-year supply has witnessed weak demand, with the low price failing to meet dealer expectations, which had been projected at 99.98, according to the BBG poll.

  • Moreover, the cover ratio has decreased to 3.206x compared to 3.950x recorded in last month's auction. Moreover, the cover ratio observed today was the lowest for a 2-year auction since 2010.
  • It is noteworthy that today’s 2-year JGB auction today is the first 2-year supply since the BoJ's decision to tweak yield curve control (YCC).
  • Accordingly, today’s result is not entirely surprising, even though the 2-year yield on offer was the highest since January’s 2-year offering. The 5-year JGB auction in August also saw lacklustre demand.
  • The 2-year JGB is 0.6bp higher at +0.009% in post-auction trade, with JGB futures little changed.

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