(Bloomberg) — The yen rallied while stocks and bonds slumped in the wake of the Bank of Japan’s unexpected adjustment to its yield-curve control policy. Most Read from Bloomberg A day that began with listless, mildly downbeat trading in Asia was thrown into turmoil when the BOJ increased the upper limit of its tolerance band on 10-year government bonds to 0.5% from 0.25%. The Japanese currency, which had been appreciating since late October, surged almost 3% versus the dollar to the strongest level since mid- August. US and European equity futures slipped and Asian stocks extended declines, with a gauge of regional shares headed for a fourth straight drop. Japan’s 10-year yield, which had moved at a glacial pace in recent years under the weight of the BOJ’s YCC regime, surged more than 20 basis points, to the highest since 2015. Similar-maturity yields in Australia were up by around the same amount while the 10-year Treasury yield leaped 10 basis points for a second day.”The Bank of Japan once again teach us that complacency is the devil,” Matthew Simpson, senior market analyst at City Index, wrote in a note. “This is arguably the biggest surprise they have handed markets since moving to negative interest rates in January 2016.” “A wider YCC band favors a stronger yen as long as 10-year Treasuries don’t sell by more than Japanese government bonds,” said Rodrigo Catril, the bank’s Sydney-based strategist. A gauge of the dollar dropped as the yen rallied. Then yen also showed notable gains against currencies including the euro and the Australian dollar. Story continuesEquities were already on the back foot given broader investor concern on the global inflation outlook. Underscoring the poor global sentiment, former New York Fed President and Bloomberg Opinion columnist William Dudley told Bloomberg Television on Monday that optimistic markets could only make the central bank tighten even more. In commodities, iron ore was among the key industrial materials to climb after a pledge of growth support from the Beijing authorities. Oil steadied, with West Texas Intermediate above $75 a barrel, and gold rose. Key events this week: US housing starts, TuesdayEIA Crude Oil Inventory Report, WednesdayUS existing home sales, US Conference Board consumer confidence, WednesdayUS GDP, initial jobless claims, US Conf. Board leading index, ThursdayUS consumer income, new home sales, US durable goods, PCE deflator, University of Michigan consumer sentiment, FridaySome of the main moves in markets as of 7:30 am Tokyo time:StocksS&P 500 futures fell 1% as of 2 :46 pm in Tokyo. The S&P 500 closed down 0.9%. The Nasdaq 100 futures fell 1.2%. The Nasdaq 100 closed down 1.4%Japan’s Topix fell 1.7%Australia’s S&P/ASX 200 fell 1.5%Hong Kong’s Hang Seng fell 2.1%The Shanghai Composite fell 1.3%Euro Stoxx 50 futures fell 1.6%CurrenciesThe Bloomberg Dollar Spot Index fell 0.2%The euro fell 0.2% to $1.0585The Japanese yen rose 2.8% to 133.14 per dollarThe offshore yuan was little changed at 6.9904 per dollarCryptocurrenciesBitcoin rose 1.1% to $16,771.23Ether rose 2.6% to $1,206.4BondsThe yield on 10-year Treasures eight advanced basis points to 3.67%Japan’s 10-year yield advanced 15 basis points to 0.41%Australia’s 10-year yield advanced 19 basis points to 3.73%CommoditiesThis story was produced with the assistance of Bloomberg Automation.–With assistance from Jason Scott, Toru Fujioka, Sumio Ito and Ruth Carson Most Read from Bloomberg Businessweek©2022 Bloomberg LP