The Bank of Japan took the markets by surprise on Tuesday, by expanding its target band for 10-year yields to 50 basis points from 25, in a move that could bring more flexibility to the central bank’s monetary policy.

The BOJ has some $7.5 trillion equivalent of yen to refinance, that’s how much Japan’s sovereign bond market represents.

In the past six years, Governor Haruhiko Kuroda has tried to tame the cost of the government’s borrowing and imposed a yield-curve control policy, or YCC, to 0.25% above or below the central bank’s 0% target.

But, according to Reuters, the U.S. Federal Reserve’s dramatic interest rate hikes have made the BOJ’s adherence to extraordinarily low-interest rates look unsustainable.

The yen dropped by a third against the U.S. dollar between March and October, due to the widening gap between American and Japanese government bond yields.

As a consequence, Japan’s bond market started to deteriorate, since investors began refusing to trade at the rates Kuroda set.

Now, BOJ is trying to give investors more buying space by smoothing the yield curve, even though the interest rates remained so far unchanged.

Even more so, the central bank announced unscheduled bond-buying operations, offering to purchase 600 billion yen in Japanese government bonds with a maturity range of one to three years.

The central bank earlier said it would increase its outright purchases of JGBs to around 9 trillion yen per month from January until March – up from the previously planned 7.3 trillion yen.

Bond traders immediately pushed the 10-year yield up to 0.4%, even though Kuroda said that BOJ doesn’t “need to review YCC or quantitative easing”.

The central bank introduced its yield curve control mechanism in September 2016, intending to lift inflation towards its 2% target after a prolonged period of economic stagnation and ultra-low inflation.

The YCC change prompted the Japanese yen and bond yields around the world to rise, while stocks in Asia-Pacific tanked.

Increased volatility in the cost of Japanese money could impact asset prices worldwide, given the yen’s importance as a funding currency.