The JGB market got some lift from losses in stock prices and from index-trackers (funds) stepping in to purchase government debt paper.

The latest data show that the year-on-year change in the core national CPI has been at or above the zero for the past three months. This should be interpreted as a sign that Japan is emerging from deflation, and this is in line with the central bank's view.

The GDP data emerged largely in line with market expectations, so they moved to liquidate their short positions to pocket profits.

The headline figure was not as strong as expected but the overall picture is strong. Bonds are falling as investors focus on the strong parts of the report.

In addition a report that Japanese banks stepped up the reduction in their JGB holdings also weighed on sentiment here.

A gain in the Nikkei above 16,500 will test investors' nerves and lead them to hold off buying bonds, pushing up yields.

Once a round of purchases by investors targeting bargains wanes, JGB prices will likely fall further going forward.

The Bank of Japan's decision was well anticipated. Most measures it plans to implement appear to be within market expectations.

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

The news could be a trigger to buy bonds. Investors dislike uncertainty.