BOJ under pressure as 10year yield nears 1 cap set in July
No consensus within BOJ on whether more YCC tweaks needed in Oct
Some in BOJ opposed to steps that would be seen as rate hike
Fate of YCC to come under scrutiny at BOJ39;s Oct. 3031 meeting

TOKYO, Oct 23 Reuters A recent surge in global interest rates is heightening pressure on the Bank of Japan to change its bond yield control next week, with a hike to an existing yield cap set just three months ago being discussed as a possibility.

Any decision to change its yield curve control YCC will largely depend on how markets move leading up the Oct. 3031 policy meeting, three sources familiar with the matter told Reuters, speaking on condition of anonymity due to the sensitivity of the matter.

The sources said there is currently no consensus within the central bank on whether an immediate change to YCC is necessary.

The BOJ remains a global outlier having maintained ultraloose monetary stimulus even as major central banks elsewhere rapidly raised interest rates to fight rampant inflation.

The widening policy gap between Japan and its peers has weighed heavily on the yen, which has in turn fanned imported inflation.

Meanwhile, rising U.S. bond yields are pulling their Japanese counterparts higher, complicating the BOJ39;s task of keeping local interest rates low.

It39;s true Japanese longterm interest rates are rising more than expected, said one of the sources.

Depending on market developments, it can39;t be…