In yet another attempt to defend the yield cap at 0.25%, the Bank of Japan (BOJ) announced on Wednesday that it will conduct an unlimited fixed-rate purchase operation for Japanese Government Bonds (JGBs).

The Japanese central bank will buy 10-year JGBs at 0.25% in unlimited quantity.

This comes as the 10-year JGB yield opened near 0.25%.

Market reaction

In response to the BOJ intervention in the bond market, USD/JPY retreated sharply to near 128.90 before recapturing the 129.00 level.

At the time of writing, the pair is trading at 129.13, up 0.17% on the day, having hit fresh 20-year highs at 129.40 pre-Tokyo open.