Bonds are looking at equities. The equity market has stabilized after yesterday's tumble and the auction lends a negative backdrop because the market has to absorb more supply.

There's anecdotal evidence that individual investors are looking more toward the equity market than real estate. It's a good sign initially that there's new demand, but it could suggest we're at the final stages of the advance.

Many investors were sidelined awaiting the outcome of the 20-year JGB auction while firmer equity prices also kept market participants at bay.

The bond market is at a ridiculous valuation, whereas the stock valuation is low relative to bonds.

The environment is becoming unfavorable to bonds. I don't think the auction will be good.

And if not for the gyrations in the equity market, it would have been a lot thinner.