Ive been bullish on bonds, but as of yesterday have switched to being bearish. The low was seen as of a couple weeks ago at 3.93%, and am confident in projecting 4.70% yield on the 10 yr sometime in 2004. This very well could be the trade of the year. Just a thought.
Ten year JGB are yielding 1.3% - see http://www.bloomberg.com/markets/rates/japan.html I think this is an even better short than US bonds, and besides the carry cost is lower (1.3% vs around 4% for US bonds). The carry cost is the interest you have to pay when you go short a bonds future. Marc Faber recommended a short on the JGB in his June Newsletter when ten year yields where around 0.60%. See http://www.gloomboomdoom.com/!gbdreport_samples/GBD0306.pdf (Pages 14-16). The 10 year mini-JGB futures trade on the Singapore Exchange, and the larger 10 year JGB futures trade on the Tokyo Exchange.