A rapid gain in the yen will probably lower bond yields. The yen rose to a quite high level. |
Bonds will probably stay strong. Further gains in the yen are a risk factor that can push down bond yields. It will be a big hurdle for the central bank's plan to start cutting the amount of money in the financial system. |
Many investors did not expect that yields would decline from the start of the year. They rather not to have a 1.4 percent coupon the new debt. |
People in the market are staying on guard against advances in Japanese stocks after the rally in the U.S.. |
There is a group of people in the market who want to buy at the auction. The five-year sale will probably give medium-term debt a chance to rebound. |
There will be little room for bonds to rise ahead of the auction. Some investors may not be in a rush to buy bonds. |