The report suggests we're one step closer to the Bank of Japan's exit from its current loose monetary policy. That's negative for Japanese government bonds.

Market participants are reluctant to take fresh positions before the release of Jan US non-farm payroll data.

People are paying attention to what Fukui will say. It's hard to find a reason to buy bonds as yields are rising.

Deposits stopped growing and household money is heading increasingly to risk assets and will continue to do so as long as Japanese interest rates are zero.

US Treasuries, particularly long-term bonds, were robust on Friday, when the Japanese market was closed. Some bond investors view the surge in stocks as bubble while some investors take comfort in the view that the zero-interest rate policy will continue even after the Bank of Japan lifts ultra-loose monetary stance.

There's speculation out there that more policy makers will cast votes against keeping the policy unchanged. That is negative for bonds.

The bond market reacted directly to the equities market, like a textbook example.

The market was caught off guard.