The Bank of Japan headquarters in Tokyo. Policymakers are gauging the impact of BOJ’s negative interest-rate strategy adopted in January. Image Credit: Bloomberg

Japan's benchmark yield climbed above the central bank's policy ceiling and monetary authorities announced unscheduled bond purchases to rein it back in.

The yield on the 10-year note rose 0.5 basis points to 0.255% as the Bank of Japan held its first unscheduled bond buying operation since its fourth-quarter plan. Global yields have continued to march higher as traders increase their expectations for peak Federal Reserve policy rates.

The rise above 0.25% underscores deep-rooted speculation in the market that the Bank of Japan will have to tweak its yield curve control policy, which looks increasingly at odds with other central bank peers. While the nation's still anemic growth prospects argue for continued policy accommodation, rock-bottom interest rates have driven the yen to a 32-year low, boosting imported inflation both for consumers and businesses.

Still, the BOJ has been stepping up defence of its policy. It started an unlimited bond-buying operation every day in May to cap 10-year yields at 0.25%. The BOJ also plans to buy more debt in the fourth quarter than the previous one through its regular operations.