The yield of 20-year notes jumped 5 basis points to 1.320%, its highest level since October 2014.

Yields across the curve have been rising since the BOJ surprised the market last week by raising the cap on 10-year bond yield to 0.5% from 0.25%.

"The allowance of the wider band for 10-year notes only fuelled speculation on the Bank of Japan's further actions, which is driving the sell-off," said Kazuhiko Sano, a strategist at Tokai Tokyo Securities.

The rise in the 20-year bond yield has put more upward pressure on the 10-year bond yield, Sano said.

After the emergency bond buying failed to contain elevated yields, the BOJ announced it would offer 1 trillion yen ($7.48 billion) of funds to the market with zero interest rate for two years on Jan. 4.

The move was aimed at encouraging investors to buy two-year notes, said Keisuke Tsuruta, fixed income strategist at Mitsubishi UFJ Morgan Stanley Securities.

The two-year JGB yield, which turned positive for the first time in seven years last week, was at 0.045%, its highest level since March 2015, before falling to 0.035%.

"The BOJ is struggling to contain yields since it made a tweak in its ultra-low rate policy," Tsuruta said.

Earlier in the day, the BOJ conducted unscheduled bond buying, targeting securities with one- to 10-year maturities. Later, it conducted a similar operation for bonds with five- to 10-year maturities.

The bank also offered to buy unlimited amounts of bonds with two- and five-year maturities for a second straight session.

Those operations were in addition to the central bank's daily offers to buy unlimited amounts of bonds with 10-year maturities.

But yields rose, with the 10-year JGB yield rising 0.5 basis point to 0.455%. The 10-year notes to be issued next month carried 0.495% yield in the so-called when-issued market.

The 30-year JGB yield climbed 4.5 basis points to 1.615%. The 40-year JGB yield jumped 6.5 basis points to 1.860%.

The five-year yield was flat at 0.240%.

($1 = 133.7000 yen)

(Reporting by Junko Fujita; Editing by Vinay Dwivedi & Simon Cameron-Moore)

By Junko Fujita