The Bank of Japan on Tuesday announced a set of monetary policy changes for the first time in almost two years, outlining a more flexible policy designed to let long-term interest rates "move upward and downward" as policymakers look to create more flexibility to continue unprecedented monetary stimulus.

Inflation forecasts released Tuesday were also revised downward, calling into question the exact timing as to when and if the BOJ will reach its 2 percent inflation target.

While the policy statement released by the BOJ outlined a plan to keep the foot on the stimulus gas for "an extended period of time," the policy tweaks also showed that the central bank may be willing to let some interest rates rise slightly, a potentially large break after years of pushing rates toward historical lows.