The Bank of Japan announced an unscheduled bond-purchase operation on Wednesday, reminding the market of its determination to slow the pace of increases in sovereign yields.
The operation had no immediate impact on the benchmark 10-year yield, which earlier in the day touched 0.815%, a fresh decade high. Japanese government bonds have faced renewed pressure amid a selloff in U.S. Treasurys, and as traders test the BOJ’s tolerance in the lead-up to a monetary policy meeting on Oct. 30-31.
The central bank stepped into the debt market three times prior to Wednesday’s action with unscheduled operations after adjusting yield-curve control on July 28 to make the program more flexible. Some investors saw the July tweak as a move toward ending the negative interest rate policy as inflation remains above the BOJ’s 2% target.