The yen surged against the dollar on Tuesday after the Bank of Japan said it would review its yield curve control policy and widened the trading band for the 10-year government bond yield in an unexpected tweak.While it kept broad policy settings unchanged - pinning short-term JGB yields at -0.1 per cent and the 10-year yield around zero - it widened the allowable band for long-term yields to 50 basis points either side of that, from 25 basis points previously.The dollar tumbled as much as 2.78 per cent to 133.11 yen, a level last seen on Aug. 16, before last trading 2.62 per cent weaker at 133.345. It had been slightly stronger at about 137.40 yen ahead of the policy announcement.Eyes will now be trained on BOJ Governor Haruhiko Kuroda's media briefing later in the day for additional hints about a pivot away from ultra-easy policy. Most BOJ watchers had expected no changes until his 10-year term finishes at the end of March."This was really out of the box," said Bart Wakabayashi, branch manager at State Street in Tokyo."We're seeing them start to test the market about the exit strategy," he added. "It will depend on Kuroda's comments later today, but we could see a break below 130. It's very much within reach this year."The 10-year JGB yield jumped to 0.46 per cent from the previous cap at 0.25 per cent. It pulled equivalent US Treasury yields higher as well, with the 10-year soaring to the highest this month at 3.711 per cent.The US dollar index sank though, dropping 0.31 per cent to 104.30, bringing it back to the middle of its trading range this month of 103.44-105.90. The index measures the greenback against the yen and five other major peers, including the euro and sterling.It had been moving toward the top of that range before the BOJ announcement as investors continued to digest the Federal Reserve's message of higher interest rates for longer.The euro was flat at $1.0609, holding on to Monday's 0.23 per cent gain following an upbeat reading of German business morale. Earlier that day, if had languished at the lowest since Dec. 13 at $1.05755.Sterling was also little changed at $1.21435, holding close to the previous session's nearly two-week low of $1.2120.New Zealand's dollar dropped 0.6 per cent to $0.6326 after a big decline in a survey of local business confidence.The Australia dollar slumped 0.52 per cent to $0.6664, and touched $0.6662 for the first time since Nov. 29.Earlier, the Aussie had shrugged off minutes of the Reserve Bank of Australia's Dec. 6 meeting that showed policymakers considered a half-point hike and a pause before opting for a quarter-point rate increase.Those minutes reinforced the "uncertain outlook" for policy, providing an additional weight on the Australian dollar, said Sean Callow, a strategist at Westpac."Unease over China's haphazard COVID policy changes also seems to be keeping a lid on AUD/USD," Mr Callow added.