Everyone is confident about 2006 growth. It may be lower than 2005, but it will still be quite solid.

A sell off in the longer end may continue. A 2 percent yield, not only a coupon, is needed to digest the auction.

Yields on bonds, especially five-year and shorter debt, will have a bias to rise. Fukui didn't necessarily deny a possible policy shift and I still see an almost 100 percent chance for an April move.

People were concerned that the market will start pricing in the argument that the central bank will raise interest rates to a neutral level since deflation in Japan has ended. Yields will have a bias to rise.