Mizuho Securities presents a preview of the upcoming 10y JGB auction, balancing yield-based incentives against market anxiety surrounding Japanese fiscal policy. The report recommends a cautious approach using 7s10s flatteners.
Key Takeaways
- 1.The MOF will auction approximately JPY 2.6 trillion of the new 10y JGB (JB383).
- 2.Potential demand exists due to absolute yield levels and current curve cheapness, though reflationary policy concerns persist.
- 3.Strategists recommend focusing on 7s10s flatteners as a relative value play, given caution regarding potential upward pressure on long-term rates.
Table of Contents
- (1) Positives and negatives ahead of the 10y auction
- (2) Auction strategy
- (3) Key charts
Document Preview
Access the Full Report
Get unlimited access to institutional research reports with a 14-day free trial.
Authors
Noriatsu Tanji
Securities
JB383
Themes
Reflationary PolicyYield Curve Strategy
Regions
Asia PacificJapan