Because j is a scalar then z(j,1) refers to one element of z. There is nothing preventing newY from having multiple values (in fact this seems to be the point of your code). So you are trying to fit multiple elements into one element. Thus the error.
Basically you are doing this:
>> X(1,1) = 1:3
Subscripted assignment dimension mismatch.
Because multiple numeric elements do not fit into one numeric element.
You might like to use a cell array instead:
z{j,1} = newY;
