TOKYO, Oct 25 Reuters Japan39;s 10year government bond yield touched a new decadehigh on Wednesday on speculation that the Bank of Japan BOJ may raise its cap for the benchmark yield.

The 10year JGB yield rose to 0.865 earlier in the session, its highest since July 2013. The yield retreated to 0.850, up 1 basis point bps from the previous session.

A recent surge in global interest rates is heightening pressure on the BOJ to raise the existing cap on the 10year bond yield at its policy meeting next week.

If the BOJ raises the ceiling of the 10year bond yield, that implies the BOJ39;s stance to protect its yield curve control YCC is different from before, said Naoya Hasegawa, senior bond strategist at Okasan Securities.

When Haruhiko Kuroda was the governor, they conducted relentless bond buying to contain elevated yields. But according to what media has reported, the current administration is trying to raise the ceiling so that the BOJ can reduce the bondbuying amounts.

The BOJ has conducted several unscheduled bondbuying operations recently, including the one in the previous session. Strategists have said the BOJ has not aggressively tried to contain yields based on the amounts they offered to buy.

The central bank uses the YCC to guide the 10year yield to around 0 to support the economy. In July, it raised the defacto cap on the yield to 1.0 from 0.5 to allow longterm rates to rise more, reflecting increasing inflation.

The fiveyear yield was flat at 0.355….