But when you think about it, the Nikkei remains above 16,000 and, level-wise, the 1.4 percent region (for 10-year bonds) is too low, so we're not likely to see too much more buying from this point on.
Twenty-year bonds have risen too far given the auction tomorrow. Traders are likely to try and back up the yield to closer to 2 percent for the auction.
The five-year notes became cheaper against the 10-year bonds on the yield curve.
Considering the strong demand among people in the market, 10-year yield won't stay above 1.6 percent for a long time. Even if it reaches it, it won't probably hold for a long time.
Bonds are unlikely to rise as people in the market are aiming for the 1.6 percent coupon.
There may be some selling as people want a higher coupon for the new debt. A 2.2 percent coupon may disappoint investors.
His intentions were not very clear but there is a sense of disappointment in the market, considering some people were thinking the recent spikes in the short to intermediate sector of the yield curve were overdone.
If the central bank acts this week, it will probably come up with ways to limit rate increases to ease concerns of the government and investors.
Investors may become cautious about buying bonds given the plunge in U.S. Treasuries and European bonds. Bonds will probably stay lower ahead of the series of the economic indicators.