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A bloodbath for bonds? Here’s the tipping point to look out for

First Japan, and now China, is getting markets notably the bond world stirred up.

Bonds are the topic du jour, especially after the Bank of Japan got everyone a bit worked up yesterday by trimming its government bond purchases. Then this morning, Bloomberg reported China is considering cutting back on its U.S. Treasury holdings.

Timing is everything. That news has been tanking stock futures and setting up a tough morning for U.S. government paper. That’s after the yield on the 10-year T-bond hit its highest since March yesterday.

With stocks trading at record highs, some do worry that stocks could get hurt if bond yields start flying higher.