Over the past 2 weeks, there has been quite a lot of speculation on the effects of Japanese monetary policy communications on US Treasuries.  I've mentioned these in passing, but haven't really spent too much time on it because I didn't happen to agree that it was the most important market mover in play.  Today brings a bit of vindication for that stance as Japan was out overnight with a policy announcement that essentially aimed to quell all the recent speculation.  

As far as Japanese bond yields are concerned, the BOJ (Bank of Japan) was successful.  Yields quickly rallied about as much as they'd previously sold off on July 20th.  So how much was this worth to US Treasuries?  As it turns out, not very much.  This is how the chart looks if we scale it based on a time frame leading up to July 20th.  Clearly, it was a big deal for Japan, but not nearly as big for the US.

While US bond markets were certainly affected, they also have bigger fish to fry.  The breaking of the recent range (which coincided with this Japan stuff, as well as with Trump's tweets about interest rates and the Fed) generated a bit of a domino effect for trading positions.  Compounding the motivations from positions and technicals, we also have month-end today (and early month-end trading over the past few sessions).  This could be part of the reason bonds have been willing to hold the ceiling around 2.99% and why longer-term momentum (green/teal lines in the following chart) stopped short of going into oversold territory.  

The catch is that the remainder of the week won't be encumbered by month-end tradeflows.  It will be more free to go where it wants to go.  If the data is reasonably strong or better, we could find ourselves defending even higher ceilings before looking for the next major bounce.