The yield on the benchmark 10-year Japanese government bond briefly hit 0.5 percent on Friday for the first time in about 7-and-a-half years. That's the central bank's newly set upper limit.

Market sources say many investors are selling JGBs on speculation that the Bank of Japan may soon taper its easy monetary policy. The sources say investors saw a decision late last month by the BOJ as effectively raising interest rates.

The bank decided to allow the yield for the 10-year bonds to move in a range of plus or minus half a percent. The earlier range was plus or minus 0.25 percent.

The BOJ had been under pressure to join other central banks in raising interest rates.