The Japanese yen plunged to an eight-month low after Bank of Japan Governor Kazuo Ueda signaled no urgency to tighten policy, following the central bank's decision to keep benchmark interest rates unchanged.

The yen weakened 0.5% against the dollar to 153.54, its lowest level since mid-February. Japanese stocks pared gains, with the Topix index closing 0.7% higher and the Nikkei 225 edging up to a fresh record.

"Ueda’s comments led markets to believe rate hikes could be delayed further, possibly beyond January," said David Forrester, senior FX strategist at Credit Agricole in Singapore, describing Ueda’s tone as dovish.

The BOJ’s decision was widely anticipated, with 90% of surveyed economists expecting no change. Despite speculation that more policymakers might push for tightening, only two dissented—matching the previous meeting’s outcome.

"Overall, the BOJ policy board’s consensus still leans toward cautious normalization, despite two hawkish dissenters," noted Felix Ryan, a strategist at ANZ Group in Sydney.

The yen has fallen over 3% against the dollar this month, underperforming all other G-10 currencies, as markets price in Prime Minister Sanae Takaichi’s loose monetary and fiscal expansion stance. Rising energy costs have complicated the BOJ’s policy path by fueling inflation, which supports further rate hikes.

Overnight index swaps suggest traders see a nearly 50% chance of a December hike and an 80% likelihood by January.