The Bank of Japan said it conducted an unlimited government bond-buying operation at a fixed yield and that it intends to do it again, in an apparent bid to keep long-term interest rates from rising. The move has weakened the yen against the dollar.

The BOJ bought bonds at a quarter percent on Monday, and said it will also buy bonds through Thursday. This marks the first time for Japan's central bank to conduct consecutive unlimited bond buying.

The action came after the yield on the benchmark 10-year Japanese government bond rose to 0.245 percent earlier Monday. Traders have been selling JGBs, assuming the US Federal Reserve will accelerate its credit tightening.
The BOJ has been trying to keep the 10-year yield below 0.25 percent, as part of its easing measures.

When bonds are bought in the market, their prices go up and their yields come down. The bank's bond-purchase operations are aimed at limiting a rise in rates.

The BOJ's announcement pressured the Japanese currency. The yen dipped below 123 per dollar to a level not seen in over 6 years as investors sold the yen and bought the dollar, seeking higher US yields.

They expect a wider gap in interest rates between Japan and the US, as the Federal Reserve has indicated it will hike interest rates.