HALISTER1: Japan 30-Year Bond Auction May Fetch 99.35 Cut-Off Price: Survey

Japan 30-Year Bond Auction May Fetch 99.35 Cut-Off Price: Survey

(Bloomberg) --Japan’s Ministry of Finance sells 800b yen ($7.0b) of 0.6% bonds today maturing December 2046 which traded at 96.451 in when-issued trading on Wednesday.
  • Lowest accepted price of 99.35 is based on median est. of 13 traders in Bloomberg survey
    • Four estimate 99.40, three expect 99.35, two each say 99.50, 99.30 and 99.25
  • There is a bigger risk of a weak auction outcome than a risk of stronger result, according to note from SMBC Nikko Securities on Wednesday
    • Life insurers tend to postpone JGB investments in 2H to fiscal year-end
    • Thirty-year bonds are overvalued relative to swaps
  • Thirty-year yield climbed 4bps on Tuesday after bid-to-cover ratio fell at extra auction for remaining maturities of 15.5 to 39.0 years
  • Finance ministry announces results at 12:45pm Tokyo time
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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