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

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

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

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

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.

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