The BOJ's decision shook markets on Friday and contrasted sharply with Ueda's more cautious comments in recent months about the dangers of retreating too quickly from accommodative Kuroda-era policies. "There's also a small but probable risk of inflation overshooting in Japan, which gave the BOJ reason to act." NEW PRIORITIESThe BOJ's policy decision last week signalled to investors that it would now allow the 10-year government bond yield to move closer to 1% before it intervenes. 'BIT BY BIT'The shift in thinking gained momentum at the BOJ's June policy meeting, but not enough to turn the tide. It was a test case, or a preliminary exercise, toward future policy normalisation," said former BOJ board member Takahide Kiuchi.

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Persons: Issei Kato, Kazuo Ueda, Haruhiko Kuroda, Fumio, accommodative Kuroda, Ueda, YCC, There's, Hirokazu Matsuno, Seiji Adachi, Asahi Noguchi, Ryozo Himino, Shinichi Uchida, Uchida, Masato Kanda, Kanda, Takahide, Leika Kihara, Takaya Yamaguchi, Takahiko Wada, Kentaro Sugiyama, Yoshifumi, Sam Holmes Organizations: Bank of Japan, REUTERS, TOKYO, Bank, Ueda, Reuters, BIT, Asahi, Nikkei, Thomson Locations: Tokyo, Japan