The dollar's recent weakness vs. the Japanese yen weighed on the bond market until about 2:15 p.m. EST, when a key technical level was breached in the Treasury futures pits at the

Chicago Board of Trade


The move in the price of the June bond futures contract above 121 20/32 triggered a round of short-covering that carried Treasuries into positive territory.

The benchmark 30-year bond itself ended the day up 7/32 at 96 7/32, dropping its yield a basis point to 5.51%. Most shorter-maturity note yields also ended the day down a basis point.

Very little else of note happened in bonds today. The only economic indicator of the day -- the March

Housing Market Index

-- was market-friendly but doesn't carry much weight. The index, which rates demand for single-family homes on a scale of 0 to 100, declined for the third month in a row to 69, but remains very high by historical standards.

And volume was laughably light. Only $29.9 billion of Treasuries changed hands by 3 p.m. EST, 51.7% below average for a first-quarter Monday, according to tracker



The key technical level on the contract represented the upper end of the trading range of the last couple of weeks, and the intraday high on

March 5, when the release of the Februrary

employment report

triggered a monster rally, said Ken Fan, bond strategist at

Paribas Capital Markets

. "Once that level was taken by a couple of dealers with large purchases, there was quite a bit of short-covering," he said.

"It kind of caught the market by surprise, because bonds hadn't moved since about 11 a.m.," Fan added. "It was a two-tick market for almost three hours, and then all of a sudden it just took off."

Traders may have been hanging back today because



Alan Greenspan

is scheduled to give a speech tomorrow at 11:30 a.m EST.

And while the strength in stocks that has the

Dow Jones Industrial Average

chugging toward 10,000 and the recent rebound in oil prices are both negative for bonds, one can still make a fundamental case for owning them, Fan observed.

Last month's rout lifted Treasury yields to levels not seen since last summer, when the Fed's official bias was in favor of a higher fed funds rate. "Now, we're only speculating about a return to a tightening bias, so Treasuries are at fairly attractive yield levels," he said.