BNP on what to watch that'd trigger another downward spiral for the yen

ICYMI, from yesterday:

1. BOJ offers to buy an unlimited amount of 10-year JGBs. USD/JPY pops.
2. A slap in the face for the BOJ - says it received no bids for 10-year JGBs
3. BOJ makes second offer today to buy unlimited amount of 10-year JGBs at 0.25%
4. BOJ reaching desperation point to try and maintain yield curve control

Long story short:

• The BOJ announced a one-time fixed-rate purchase operation after the yield on 10-year JGBs hit 0.245%, approaching the BOJ's target ceiling of 0.25%
• The JGB 10yr yield fell to 0.24% ... the bank later announced it had no takers on its morning offer
• continued selling pressure lifted the yield to 0.25% later on Monday afternoon. The BOJ responded with a second offer and ultimately purchased 64.5 billion yen ($528 million) worth of JGBs.
• the yield refused to drop much, wich prompted the BOJ to announce the same purchase operation starting from Tuesday to Thursday

BNP analysts:

• If US rate hikes or a weak yen again exerts upward pressure on long rates, and the BOJ responds with another fixed-rate operation, it could trigger a negative spiral that further devalues the yen

USD/JPY update: