The BOJ is prepared to allow yields to fluctuate within a range, but that range is not a firm target, Seiichi Shimizu said, according to Nikkei.

Instead, the BOJ will look at the speed, direction and volatility of moves in yields when deciding the amount of bonds to buy in its market operations.

"We are not trying to pinpoint a specific level," Shimizu said, according to Nikkei.

"We expect rates to rise and fall due to market forces."

The BOJ last month switched its policy target to interest rates from expanding the monetary base after its massive asset purchases failed to generate sustained inflation.

Under a new "yield curve control" framework, the BOJ's main means for monetary easing would be to deepen negative interest rates from the current minus 0.1 percent, or lower its 10-year bond yield target - now set at around zero percent.

The policy switch has caused some confusion because investors are not sure how low the BOJ will let 10-year bond yields fall.

(Reporting by Stanley White; Editing by Jacqueline Wong)