Step up buying, ease rates: What BOJ can do for rising Japanese bond yields

As Japan's long-term interest rates rise, investors are wondering at what point the central bank will step in to defend its 0% target for the 10-year yield as part of an ultra-easy monetary policy.

Prospects of accelerated U.S. policy tightening have pushed the benchmark 10-year Japanese government bond (JGB) yields to six-year highs above 0.2%, close to the implicit 0.25% ceiling the BOJ sets around its 0% target.

Speculation the BOJ could change the target of its yield-curve-control to the five-year note from the 10-year has also pushed the five-year JGB yield to a six-year high and above zero.

Analysts