The Bank of Japan Tuesday doubled its inflation target to 2 percent and adopted an open-ended commitment to buy assets, surprising markets that had expected another incremental increase in its 101 trillion yen ($1.12 trillion) asset-buying and lending program, Reuters reported.

The BOJ also issued a joint statement with the government in which it set 2 percent inflation as its new target, although two of the central bank's nine board members dissented.

As widely expected, the BOJ maintained its overnight call rate target at a range of zero to 0.1 percent by a unanimous vote.

BOJ Governor Masaaki Shirakawa was to hold a news conference on the move later in the day.

The BOJ set a 1 percent inflation target last February, and it expanded monetary stimulus five times in 2012 through an increase in its asset-buying and lending program.

Prime Minister Shinzo Abe, however, has piled pressure on the central bank to aim for 2 percent inflation as a medium-term target and pledge to ease policy aggressively to achieve it.

“The BOJ is moving into new territory,” Masaaki Kanno, chief economist at JPMorgan Securities Japan Co. and a former BOJ official, told Bloomberg. “Two percent inflation will be hard to achieve any time soon, so the BOJ will keep pushing easy policy for quite a long time.”

The central bank aims to achieve its new inflation target at “the earliest possible time.” A forecast released with the announcement showed that the BOJ sees a gain in consumer prices of 0.9 percent for the fiscal year starting April 2014.

After the announcement, five-year government bond yields fell to 0.145 percent, the lowest since June 2003, Bloomberg reported.