The yen weakened against the dollar after the Bank of Japan kept its benchmark interest rate unchanged. The currency fell as much as 0.2% to 158.74 per dollar, marking a continuation of its recent downtrend. This move reflects market disappointment over the central bank's decision not to tighten policy.

For months, investors have bet on a potential BOJ rate hike to combat persistent inflation and support the yen. Instead, the central bank maintained its ultra-low rates, a stance that has kept the currency under pressure. A weaker yen boosts Japanese exporters' overseas profits but raises import costs for consumers and businesses.

The currency's slide to multi-decade lows complicates the policy landscape for the BOJ. Governor Kazuo Ueda faces growing calls to address the yen's weakness, which threatens to fuel imported inflation. Markets now look to upcoming policy meetings for any signal of a shift, though the timing remains uncertain.