The yen was sharply higher against the dollar and the euro in Asian trade Wednesday, after the Bank of Japan’s decision to stand pat on its main policy dashed faint hopes among investors for additional monetary easing.

The dollar USDJPY, -0.82%  was at ¥117.54, after touching ¥117.66, compared with ¥118.70 late Tuesday in New York. The euro EURJPY, -0.55%  also slipped to ¥136.03 from ¥137.10.

As jittery investors awaited the outcome of the BOJ meeting, the greenback started to ratchet down from its overnight gains, falling to as low as ¥118.15 around the lunch break, in keeping with a falloff in the Nikkei Stock Average NIK, -0.49%  of about 0.5%.

Then the dollar slid below the ¥118 mark, as the central bank left its key easing policy unchanged, disappointing some investors who had started to build up hopes of a surprise move.

The greenback’s decline shows “expectations (for BOJ easing) were too strong,” said a senior dealer at a Japanese bank, adding that the U.S. currency may still find support on dip-buying from Japanese investors and short-term speculators provided the stock market doesn’t fall much further. The Nikkei index was down 0.7% midday.

WSJ Market Wrap: Jan. 20, 2015

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Extra easing from BOJ? Some market participants cited talk circulating in financial markets that the BOJ might go ahead with extra easing ahead of the European Central Bank’s widely expected move to introduce a sovereign bond-purchase program at its policy meeting Thursday. They pointed to Tuesday’s gains in Tokyo shares and the dollar against the yen as an indication of those hopes.

A continued slide in oil prices is making it more difficult for the BOJ to achieve its 2% inflation target, but the absence of extra easing measures suggests the BOJ remains optimistic that underlying inflation remains in place and the economy could grow faster down the line.

In updated price and growth projections for the next two years, however, the central bank cut its median forecast for the average rise in the consumer price index in the year starting April 2015 to 1.0%, from 1.7% previously.

Now investors are shifting their attention to BOJ Gov. Haruhiko Kuroda’s press conference, where he will explain the policy decision and the updated projections on the economy.

The dollar-yen price movement today reflected an “elimination of hope” that the central bank would take extra easing at the meeting, said Toshihiko Sakai, senior manager of forex and financial products trading division at Mitsubishi UFJ Trust and Banking Corp.

“I think there is no change in the main tide,” said Sakai, who expects the dollar will likely move in a ¥115-¥120 range for some time in future.

Ahead of the ECB meeting Thursday, the euro EURUSD, +0.26%  was at $ 1.1564 from $ 1.1551.

The WSJ Dollar Index BUXX, -0.34% a measure of the dollar against a basket of major currencies, was down 0.29% at 84.09.