The second day exceeded the central bank's 0.5% target
Positive market BOJ will take further steps in YCC
The BOJ meeting is the focus
Benchmark Japanese government bond yields rose above the 'ceiling' set by the central bank for a second day as investors expected another additional step in yield control (YCC) policy.
After jumping as high as 0.545% on Friday, Japan's 10-year bond yield continued to beat the target by rising 0.51% on Monday.
In December, the central bank surprised the market by allowing bond yields to hover around the +/-0.5% range from the previous 0.25% to improve market function.
However, Japan's 10-year bond yield is starting to test those levels ahead of the BOJ's policy meeting on Wednesday.
The central bank is said to be reviewing the impact of its policies and may make further changes to its YCC.
The BOJ bought a total of $11 billion of debt across maturities ranging from one year to 25 years on Monday and offered to buy unlimited two-year notes at a fixed yield of 0.03%.
This is part of its daily offer for unlimited central bank bond purchases.
At the time of writing, the yen remained trading stronger around a 7-month high against the USD at 127.43.
