That's a notable drop as bonds catch a strong bid following the dismal PMI readings from France and Germany earlier in the day. 10-year Treasury yields are also down nearly 6 bps to 3.10% currently as well - its lowest in two weeks.

The only real comfort is that the 10-year Italian and German bond yields spread is still sticking at just above 200 bps for now:


But the fact that yields are looking heavier today continues to light a fire under the yen, as it carries on with strong gains in the major currencies space. USD/JPY is down 0.7% to 135.30 on the day and a break back below 135.00 will invite questions on the breakout move earlier in the week.