Investors are thinking the BOJ may change its monetary policy sooner than expected and that's why bonds are falling.

The time to reconsider the value of five-year notes arrived. I am thinking about buying five-year notes as their yields rose too much. A trade betting on flattening is about to lose its charm.

Muto's comment reversed sentiment among investors and it is a reason to sell bonds. They're now thinking the economy is still recovering and yields won't keep on falling.

The yen's strength is a shackle for the central bank that keeps it from shifting monetary policy. There's a risk bond yields will decline in the long run.

Bond yields are set to go higher. With the U.S. economy expanding and reports suggesting Japan's growth is on a firm footing, it's difficult to justify buying bonds.

Investors are buying bonds as they realize a policy shift is not so easy when the government opposes it. Expectations for a change were too excessive.