The Bank of Japan announced an unprecedented third day of unscheduled bond purchases as it fights back against speculation it has started to wind back its super-accommodative monetary policy.
The combination of additional fixed-rate and fixed-amount purchases announced Friday have boosted this month’s buying to about ¥17 trillion ($128 billion), a monthly record, according to data compiled by Bloomberg.
The BOJ’s avalanche of bond buying follows a surge in yields since it unexpectedly raised its ceiling for the benchmark 10-year note to 0.5% at its Dec. 20 meeting. While the central bank said the move was to improve market functioning, traders have interpreted it as a step toward the end of its yield-curve control policy as they load up on shorts for potentially a defining 2023 strategy.