A surprise move by the Bank of Japan to reduce the amount of bonds it buys every month under its stimulus programme has sparked jitters in the fixed income market.
The Bank of Japan has reduced its  monthly purchases of 10- to 25-year government bonds and 25 to 45-year debt by 10 billion yen ($89 million) to 190 billion yen and 80 billion yen.
While that amounts to only a small change, the hint of a tapering to stimulus was enough to send bond prices lower, and yields higher.
The yield on US 10-year treasuries hit 2.57% overnight, its highest level in 10 months, prompting fixed income guru Bill Gross to declare a 'bond bear market.'
China then added to bond investors' jitters this morning following a Bloomberg report that the country may also slow down or halt buying US treasuries. 
Gross told Bloomberg that he had gone short US treasuries, as well as other sovereigns, in his Janus Henderson Global Unconstrained Bond fund. 
‘We’ve gone short bonds, not just treasuries, but short bunds and gilts, [we’ve] left the JGB market alone,' he said.
Gross said the reports about China and moves from Japan meant there 'appears to be a negative type of posture for bonds.'
He also warned on other areas of the market.

‘I’ve also gone rather negative on high yield bonds and credit spreads because, as yields rise, zombie-like corporations pay higher yields and their spreads are compressed and their cover is compressed and so this is not a favorable element for high yield bonds or sovereign bonds,' he said. 
Jim Reid at Deutsche Bank said the market reaction was out of kilter with the Bank of Japan's move.
'While it seemed to come as a surprise, it's worth noting that the absolute purchase level was still within the Bank of Japan's target range of purchases,' he said. 'Imagine the scenario if something major happened!'