Under a policy dubbed yield curve control, the BOJ targets short-term interest rates at -0.1% and the 10-year bond yield around 0%. It also buys risky assets such as exchange-traded funds (ETF) as part of efforts to fire up inflation.
"The selloff may have run its course," said Jabaz Mathai, head of US rates strategy at Citi, pointing to inflation breakevens backing down.
"I would not say the bear market in Treasuries is over at this point, but there is the prospect of a near-term pullback," said Mathai. "You should see some stability in the 10-year around these levels."