The Bank of Japan ramped up bond buying on Tuesday as its yield cap came under renewed pressure from rising global interest rates, highlighting its difficulty in remaining a dovish outlier in a global wave of monetary tightening.
The central bank's resolve to keep yields low has helped drive the yen down to 24-year lows against the dollar, as investors have focused on the gap between Japan's ultralow interest rates and expectations of aggressive hikes by the U.S. Federal Reserve.
The BOJ expanded bond buying on Tuesday, and offered to increase a round of purchases across the curve on Wednesday, to knock the yield on the 10-year Japanese government bond (JGB) back to its 0.25% cap.