The Bank of Japan altered its controversial yield curve control (YCC) program on Friday, adopting “greater flexibility” in its operation in an apparent attempt to ease some side effects of the decadelong monetary stimulus.

The BOJ also raised its inflation forecast in the quarterly outlook released the same day, projecting that consumer prices excluding fresh food for the fiscal year through March will be 2.5%, compared with 1.8% in the April report. It also estimates the figure for fiscal 2024 will be 1.9%, down from 2.0%, while the outlook for fiscal 2025 is the same at 1.6%.

The BOJ statement after its two-day policy meeting said that while the bank will continue to purchase unlimited amounts of Japanese government bonds (JGBs) to control 10-year yields at around 0%, the current caps on the fluctuation of yields — within plus and minus 50 basis points — will be “references” instead of “rigid limits.”