I don't think there are any investors who can say with confidence that 20-year bonds are a great buy with stocks rallying. It's natural to see some selling of bonds ahead of the auction.
Yields near 1.6 percent look attractive for buyers. Concern about GM prompted some flight-to-quality buying in Japanese bonds.
Investors aren't going to chase 20-year bonds with yields under 2 percent. The market is facing selling pressure before the auction.
The slide in stocks is a positive for bonds. Further stocks declines will damp individuals' sentiment and could affect growth.
There's good demand among investors at five-year yields near 0.7 percent and 10-year yields near 1.4 percent. Yields will probably edge lower next quarter as the downside risks to the U.S. economy may materialize, threatening Japan's recovery.
The trend for firm longer bonds and weak shorter debt will continue this month. Investors feel safer buying bonds on slumping stocks.
