The Bank of Japan (BOJ) decided Tuesday to encourage further declines in longer-term interest rates while holding the key interest rate steady at 0.1 percent as part of the efforts to ease monetary policy.

The decisions were made in an emergency meeting Tuesday afternoon in response to the recent sharp climb of the Japanese yen, which erodes exporters profits when repatriated and thus hurts Japanese economy.

The central bank also "decided to further enhance easy monetary conditions by introducing a new funds-supplying operation," it said in a statement, adding in a separate paper that the amount is about 10 trillion yen (114 billion U.S. dollars).