Yields are now hitting 0.57% and this will start to test the mettle of the BOJ in how they will be conducting their "new" policy. They mentioned that the 0.50% allowance from zero is no longer a "rigid limit" but more so of a "reference", with the hard line being drawn at the 1.00% mark.
However, they did mention that in between those levels, they will be "nimbly" conducting market operations to manage yields.
I would take that as an interpretation that if they do see unwarranted or unwanted spikes in yields, they will step in to clamp that down. The question now is, how much is too much? And what is the appetite for their allowance going to be above the 0.50% threshold and how soon?
Plenty of questions and very little answers for now. But over time, expect traders to keep testing the limits of the BOJ and in turn that is how we can figure out their reaction curve.