The Japanese yen rocketed and equities in Asia suffered sharp selloffs after the Bank of Japan stunned financial markets by loosening its grip on the benchmark government bond rate, paving the way for a possible departure from decades of easy money policy.

The BoJ will widen the band within which it allows the 10-year government bond yield to trade at, being 0.5 per cent above or below its zero per cent target. It was previously 0.25 per cent.