By Leika Kihara and Junko Fujita

TOKYO, Reuters – Japan’s central bank offered Thursday to purchase unlimited 10-year bonds in its fourth consecutive day to protect its yield curve from the rising tide of higher interest rates.

This announcement was anticipated and aligned with earlier promises by the BOJ to keep offering the same offer through Thursday of the second quarter.

Investors focus on the possibility that the BOJ might increase bond purchase frequency and quantity under its second quarter market operation schedule. This schedule is due to be released later Thursday.

The yield of the 10-year benchmark Japanese government bond (JGB), which fell to 0.210% Wednesday because of the Bank of Japan’s huge intervention, climbed to 0.225% Thursday.

This level is still lower than the implicit limit of 0.25% that the BOJ has set around its 0% target.

Chotaro Morita from SMBC Nikko Securities said, “The BOJ could increase bond purchasing somewhat in the 2nd quarter.”

While the BOJ’s super-dovish attitude is battling rising global interest rates, central banks across the globe are racing to beat the accelerating inflation. Japan’s rate has risen due to the international rise in yields.

Tokyo’s rising import prices, due to a weakening dollar and other global consequences of the Ukraine conflict, will add complexity to this challenge.

Japan’s highest currency diplomat increased his caution against sharp yen drops Tuesday, saying that Tokyo and Washington closely communicated on currency matters.

Markets look for these phrases as indicators that a possible currency intervention might be coming.

Hirokazu Matsuno, Chief Cabinet Secretary, stated that currency stability was important. He also reiterated the government’s current official position on weak yen.

Inflation caused by the Ukraine crisis has led to an increase in raw material costs. This is causing pain for households as well as clouding Japan’s economic recovery.

Ata reported on Thursday that factory output increased 0.1% in February compared to the prior month. However, it was smaller than expected.