The Australian and New Zealand dollars slipped against the yen on Thursday after the Bank of Japan (BoJ) eased policy but failed to take the bold action the market was betting on to bolster a weak economy. The Australian currency and bonds proved resilient, however, to news the Australian government had abandoned a pledge to return its budget to surplus by June next year.

The Aussie dropped as far as 87.87, from 88.42 early, after the BoJ expanded its asset purchase and lending programme scheme by 10 trillion yen as expected. Later, the Aussie trimmed losses to last fetch 88.21 and was on track for a 12 percent gain this year. It touched a 19-month high of 89.01 on Monday.

The kiwi nudged lower to 70.28, having briefly fallen below 70. It climbed a four-year peak of 71.36 this week. The Aussie last changed hands at $1.0475, from $1.0484 early, pulling away from a three-month peak of $1.0585 hit last week. The Aussie has fallen nearly 1 percent this week.

Copyright Reuters, 2012