The BOJ had set its target yield for the benchmark 10-year Japanese government bond at around zero percent, and it has been willing to intervene to keep the benchmark yield in line with its target.
That theoretically means the BOJ can buy fewer bonds as it would only need to time its purchases for when the yield curve moves away from its target. That would help ease concerns that the central bank, which already owns more than 40 percent of all JGBs by value, would run out of bonds to buy as it continued with its planned 80 trillion yen (around $697.87 billion) annual pace of expansion of its monetary base.
The BOJ has taken essentially a “whatever it takes” stance on boosting inflation, saying it would maintain an easy stance until inflation exceeded its target of 2 percent “in a stable manner.”
Japan’s economy grew 1.2 percent annualized in the October-to-December quarter, according to revised data released last month, but that was still below the 1.6 percent forecast in a Reuters poll.
—By CNBC.Com’s Leslie Shaffer; Follow her on Twitter @LeslieShaffer1