30y JGB Auction Preview

This report previews the 30y JGB auction, noting that while fiscal expansion concerns persist as a headwind, limited upside for super-long yields makes the sector potentially attractive for medium-term holding.

Key Takeaways

• 1.The 30y JGB auction faces volatility due to fiscal expansion concerns, but medium-term holding is supported by limited room for super-long yield hikes.
• 2.Market pricing of the BOJ's terminal rate near the upper end of the 1-2.5% neutral range limits the scope for hawkish repricing and supports JGB appeal.

Table of Contents

• Positives and negatives ahead of the 30y auction
• Auction strategy
• Key charts