The BOJ pledged on Tuesday to maintain its short-term interest rate target at minus 0.1 percent and chose to guide 10-year JGB yields around zero percent.
"China's push to keep its currency weak is also a big factor in Japan's decision today and that is driving the yen's weakness against its rivals", said Simon Derrick, chief currency strategist at BNY Mellon In London. "But the actual outcome showed the BOJ maintaining its short- and long-term yield targets and also its JGB buying amount under new guidance", said Naomi Muguruma, senior market economist at Mitsubishi UFJ Morgan Stanley Securities.
Bank of Japan Governor Haruhiko Kuroda said on Tuesday the central bank would tolerate moves in the 10-year JGB yield of around 20 basis points from its policy target of zero percent, wider than the range of 10 basis points around the target allowed previously.
The Australian dollar traded up 0.3 percent at $0.7430.
Further, the bank said inflation is likely to take more time than expected to achieve the price stability target of 2 percent.
The Japanese yen fell against the dollar and is poised to register its biggest daily loss in almost three weeks on Tuesday after the central bank pledged to keep interest rates low and adopted a forward guidance model to strengthen its commitment for its massive policy stimulus. Other government bond yields edged higher too.
The BOJ will maintain its negative-rate policy for short-term rates.
The U.S. currency was 0.01 percent higher at 111.125 yen following a loss of about 0.2 percent on Friday.More news: Zimbabwe election: MDC Alliance and troops in Harare clashes
"It has become clear that the tweaks does not involve policy exits or interest rate hikes".
As the side effects of its policies piled up, the central bank faced pointed questions about how long it could keep them in place.
However, the bank said, "while doing so, the yields may move upward and downward to some extent mainly depending on developments in economic activity and prices".
The Federal Reserve is next in line to announce policy on Wednesday.
Disappointing updates from US tech heavyweights soured the mood across stock markets, knocking European shares off their six-week highs at the open and dragging down by 0.11 percent an MSCI index that tracks shares in 47 countries.
The central bank now sees core consumer prices rising just 1.1% in the current fiscal year through March, down from 1.3% projected previously. Likewise, the projection for fiscal 2019 was lowered to 1.5 percent from 1.8 percent and that for 2020 to 1.6 percent from 1.8 percent. Meanwhile, the Fed last month raised rates for a sixth time in 18 months and set a steeper rate-hike trajectory, while the European Central Bank has plotted the end of its asset purchases this year.
The 10-year yield had risen steadily over the last week, reaching a 1½-year high of 0.11 percent on Monday as the market braced for the BOJ potentially considering steps to make its huge monetary stimulus more sustainable.