The head of the central bank says its policy tweak is aimed at helping the market function more efficiently, and encouraging a smoother yield curve. BOJ Governor Kuroda Haruhiko says large fluctuations in overseas markets are causing instability in Japan.

Bank of Japan Governor Kuroda Haruhiko said, "JGB market functions are being undermined." He said if this situation continues, it may have a negative impact on the financial environment, such as the issuance of corporate bonds." The interest rate on JGBs acts as a standard for rates on corporate bonds and loans.

Kuroda also said he believes the move will help the effects of monetary easing spread smoothly through corporate finances and other areas.

But he emphasized it is not a step toward an exit strategy. He says he has no plan to further widen the yield range, as the impact from rising rates in the US and Europe is uncertain. He further said instability is being caused by global uncertainties, such as the situation in Ukraine and the COVID crisis in China.