All the talk of a bond bear market yesterday caught the market off guard

Bill Gross, Jeff Gundlach and others were out yesterday debating about what level in the 10-year note yield would indicate the start of a bear market.

Instead, today we've gotten a reversal lower in yields on a strong bond auction.

USD/JPY had been under pressure ahead of the sale but was supported by last week's low. But that level gave way on the auction and it erases the post-non-farm payrolls rally.

The selling has hit hard since the break of 115.00 with USD/JPY quickly down to 114.40.

That's why we watch bond auctions so closely. Nine times out of 10 they don't matter but once in awhile they drive the FX market.