Japanese annual inflation hit a decade-high of 1.2% in March, helping trigger one of the biggest ever sell-offs in yen bonds.
Trading in bond futures on the Tokyo Stock Exchange was halted for a time to allow the market to settle, the first test of a circuit breaker mechanism introduced to the market this year.
Like other central banks, the Bank of Japan faces rising fuel, raw materials and food prices as it considers what to do with rates, already at a very low 0.5% in Japan.
But because the increases in consumer prices in major economies are largely due to climbing costs, rather than strengthening demand, investors have until recently been eyeing more rate cuts, rather than hikes.
Japan's core inflation rate of 1.2% was just as economists had forecast but it reinforced the pressure on the BOJ to keep inflation under control, and shifted investors' focus towards an eventual rate hike.
