The Bank of Japan (BOJ) raised the yield band for 10-year Japanese government bonds from 25 to 50 basis points.

Bank of Japan (BOJ) Governor Haruhiko Kuroda changed the bank’s yield curve control program with a surprise decision.

According to the decision, the BOJ will now allow 10-year Japanese bond yields to rise to around 0.5 percent instead of 0.25 percent.

This paved the way for the 10-year bond yield to be traded in a wider band. In a written statement by the bank, it was stated that the decision would increase the sustainability of the monetary easing policy.

At the meeting, the bank did not change its policy balance rate to minus 0.1 percent or its 10-year return target at 0 percent. The BOJ announced that it would increase its bond purchases significantly to 9 trillion yen ($67.5 billion) on a monthly basis.

This figure was previously announced as 7.3 trillion yen per month.

All 47 economists surveyed by Bloomberg predicted no change in policy but expressed the view that the bank should do more to improve the functionality of the bond market.

The BOJ’s steadfast adherence to its 10-year yield ceiling to date has served as an anchor that indirectly helps keep borrowing costs around the world low. While there was activity in the financial markets behind the decision, BOJ started to buy unlimited bonds in almost all maturities.