The yen slipped to the lower 158 range against the U.S. dollar on Friday in Tokyo after the Bank of Japan's decision to hold off giving details on a planned reduction in its bond-buying was perceived by the market as the central bank maintaining a dovish stance.
The yen fell to around 158.20, its lowest compared to the dollar since late April, as the move disappointed traders who had widely expected bond purchases to be cut this month to make way for an interest rate hike in July's meeting, dealers said.
The BOJ on Friday decided to reduce its buying of government bonds as part of efforts to normalize its monetary easing policy but said a detailed plan that includes the size and timing of the reduction for the next year or two will be released at its next policy meeting in July.
"The prevailing view is that the dovish BOJ is unlikely to be aggressive like the U.S. Federal Reserve and quantitatively tighten and increase interest rates at the same time (in July)," said Takuya Kanda, senior researcher at the Gaitame.com Research Institute.
"If the BOJ was serious about stopping the yen's depreciation, it would have decided on policies leading to quantitative tightening this time instead of pre-announcing for next month," Kanda added.
At 3 p.m., the dollar fetched 158.13-18 yen compared with 156.98-157.08 yen in New York and 157.26-28 yen in Tokyo at 5 p.m. Thursday.
The euro was quoted at $1.0729-0731 and 169.67-72 yen against $1.0732-0742 and 168.61-71 yen in New York, and $1.0814-0815 and 170.07-11 yen in Tokyo late Thursday afternoon.
Stocks ended higher, with the key Nikkei index snapping a two-day losing streak, as the policy outcome led to relief among investors that accommodative monetary conditions would continue for the time being, analysts said.
The 225-issue Nikkei Stock Average ended up 94.09 points, or 0.24 percent, from Thursday at 38,814.56. The broader Topix index finished 14.83 points, or 0.54 percent, higher at 2,746.61.
On the top-tier Prime Market, gainers were led by marine transportation, oil and coal product, and wholesale trade shares.
Despite the market's rebound, gains were limited amid lingering caution ahead of BOJ chief Kazuo Ueda's press conference later in the day, as "extremely hawkish comments may lead to a sell-off on Monday," said Tomoichiro Kubota, senior market analyst at Matsui Securities Co.
