A gain in the Nikkei above 16,500 will test investors' nerves and lead them to hold off buying bonds, pushing up yields.
A pullback in US Treasury prices was behind losses in JGB prices today.
Bond prices got a boost from the fairly good outcome of today's two-year debt auction, while index-trackers actively purchased government debt paper, which supported the market.
Deposits stopped growing and household money is heading increasingly to risk assets and will continue to do so as long as Japanese interest rates are zero.
Falling stocks and a rising yen raises speculation among investors the central bank will avoid saying anything to add to an outlook for higher rates. It will encourage investors to buy bonds.
Gains in stocks will help push down bonds and I don't think investors will aggressively buy after yesterday's rally.
In addition a report that Japanese banks stepped up the reduction in their JGB holdings also weighed on sentiment here.
Many investors are reluctant to trade actively before the central bank starts its two-day meeting Wednesday.
Market expectations appear to be accelerating and unless the central bank takes action soon, it may lose the market's confidence.
Market participants are reluctant to take fresh positions before the release of Jan US non-farm payroll data.
Market participants are reluctant to take fresh positions before the release of Jan US non-farm payroll data. In addition a report that Japanese banks stepped up the reduction in their JGB holdings also weighed on sentiment here.
Once a round of purchases by investors targeting bargains wanes, JGB prices will likely fall further going forward.
People are paying attention to what Fukui will say. It's hard to find a reason to buy bonds as yields are rising.
The Bank of Japan's decision was well anticipated. Most measures it plans to implement appear to be within market expectations.
The bond market reacted directly to the equities market, like a textbook example.
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