The Nikkei is weak and that will support bonds.

We’re unlikely to see a rally in medium-term bonds with core consumer prices edging up.

Bonds will extend declines. There is no change in the fact that rates are headed higher in Japan, the U.S. and Europe.

The decline in stocks yesterday was not the start of a trend. At this level investors should sell bonds.

Bonds will find it hard to rise today. The fundamental trend that the economy is recovering has not changed.

The report will probably prompt investors to imagine the era of low rates is going change soon.

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Investors who follow the index will continue to buy longer bonds.

Firm stocks will restrain gains in bonds.

Investors may start worrying that the central bank will scale back its monthly bond purchases to reduce the amount of money in the system. That will push up yields further.

The chances of 10-year yields soaring above 1.6 percent are high. Ten- year bonds look expensive compared with five-years and so it could take some time for dealers to sell all the bonds onto investors.

Support from a lack of new supply will be short-lived.

We can clearly see consumer prices starting to rise and investors are going to demand higher yields.

The upside for bonds will be heavy. Unless there is a sudden slowdown in overseas economies, Japan’s economy will probably extend its recovery.

Investors cannot justify buying bonds and they want to avoid 10-year yields going lower than 1.3 percent. There is a five-year note auction next week and investors don’t want to have a low coupon on...