The Bank of Japan said Thursday it would buy an unlimited amount of 10-year government bonds at 0.25%, underscoring its resolve to prevent rising global yields from pushing up domestic borrowing costs too much.

This is the first such operation since July 2018 as yields creep closer to its tolerated level under its yield curve control (YCC) policy.

The offer will be made Monday, the central bank said in a statement posted on its website after the Japanese Government Bond (JGB) market closed Thursday.

Stubbornly hot inflation in the West and growing hawkishness from other major central banks such as the U.S. Federal Reserve had spurred some bets that the BOJ would need to taper its ultraloose monetary policy soon, pushing JGB yields to multiyear highs.

But inflation in Japan, while edging up, remains well below the BOJ's 2% target and the economy's recovery from a pandemic-induced slump has lagged many of its peers. Wages, in particular, are not picking up as fast as in other countries.

"The BOJ sent a strong message to markets of its resolve to curb any rise in yield above 0.25%," said Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management.

The announcement came after the benchmark 10-year JGB yield rose Thursday to 0.23%, its highest level since 2016 and close to the implicit 0.25% cap the BOJ has set around its target of 0%.

The 10-year yield briefly fell after the news and was last at 0.22%. The yen was little moved and was last at ¥115.79 per dollar, down slightly on the session.

Investors have increasingly been expecting the BOJ to intervene to rein in recent steady rises in yields. But the timing came as a surprise for some as similar previous operations were all announced during JGB market trading hours.

By announcing its plan days in advance, the BOJ sought to discourage traders from testing the 0.25% line and to preempt any breach of that level — without actually having to purchase JGBs, said former central bank board member Takahide Kiuchi.

"If the BOJ announced the offer during market hours, it would have had to buy huge amount of JGBs. That would be tantamount to strengthening monetary easing, which it wanted to avoid," he said. "It's a curve ball by the BOJ."

Naomi Muguruma, senior market economist at Mitsubishi UFJ Morgan Stanley Securities, said the BOJ probably made the announcement as a precaution to avoid yields from spiking next week after a three-day holiday in Japan that began Friday.

"It's uncertain whether JGB yields will slide back because the recent rise was driven by growing market alarm over global inflationary risks and higher U.S. Treasury yields," she said.

Under its yield curve control policy, the BOJ pledges to cap the 10-year JGB yield around 0% to keep borrowing costs low and stimulate the economy.

In a policy review conducted in March last year, the BOJ clarified that it will allow the 10-year JGB yield to move 25 basis points on either size of zero. That was intended to breathe life back into a market made dormant by the BOJ's huge presence.

Markets have been focusing on how the BOJ would respond to creeping JGB yields. The offer to buy unlimited amount of JGBs at 0.25% would be the most powerful weapon the central bank has to control the 10-year yield around its target.

Policy normalization bets have gathered pace in recent months as soaring inflation spurs global central banks to unwind pandemic-era stimulus and raise rates. The BOJ has remained an outlier, with Gov. Haruhiko Kuroda repeatedly stating the need to continue easing.

"The BOJ is trying to restore the credibility of its YCC policy framework, which has come under pressure recently following the Treasuries sell-off on the back of surging global inflation,” said Valentin Marinov, strategist at Credit Agricole. "The BOJ is clearly not worried about runaway inflation in Japan and instead seems to try to maintain favorable financial conditions.”

There’s no chance for a reduction in monetary easing, Kuroda told the Mainichi newspaper in an interview published Thursday. The chance of Japan seeing a large rise in inflation like other countries is very low, he said.

Kuroda and his officials have insisted for weeks that the BOJ isn’t in a hurry to normalize its policies. That hasn’t stopped a sell-off in Japanese bonds, with the five-year yield rising to zero on Feb. 4 — the first time since the BOJ adopted a negative-rate policy in 2016.