The Japanese yen strengthened against the dollar on Wednesday after the Bank of Japan failed to unveil any new easing measures.
At the same time, the euro slipped ahead of a gathering of European Union leaders later in the day.
Japan’s central bank left interest rates unchanged as expected, following a two-day meeting, and also maintained the size of its asset purchase program, despite political pressure to curb deflation and boost growth. 
The yen shot up following the decision, with the U.S. dollar USDJPY -0.70% falling to ¥79.62 from ¥79.82 just before the decision, and ¥79.96 yen in North American trade late Tuesday.
Capital Economics chief global economist Julian Jessop expects the yen to rise far as 70 to the dollar as the European crisis escalates.
“The Bank of Japan will be essentially powerless in the face of strong demand for safe havens from the crisis in Europe. Even the Swiss National Bank, which has set an explicit cap on Swiss franc strength, is struggling to hold the line,” Jessop said in emailed comments.
The euro EURUSD -0.37% traded at $1.2673, edging down from $1.2688 in North American trade late Tuesday.
The shared currency was under pressure ahead of an informal summit of European Union (EU) leaders later Wednesday.
Officials are expected to canvass Greece’s future in the euro-zone, as well as the prospect of issuing jointly backed bonds and a potential regional deposit insurance to prevent bank runs stemming from rising fears over the region’s banking sector.
Anxiety ahead of the EU summit kept risk appetite firmly contained during Asian trading hours, with equity markets notching falls between 1% and 2%.
That saw the risk-tied Australian dollar continued its recent slide, as the Australian unit AUDUSD -0.68% fell to 97.76 U.S. cents, from 98.02 cents in North American trading late Tuesday.
The ICE dollar index DXY +0.00% , which tracks the greenback against a basket of six major currencies, slipped 81.670, from 81.674, compared with 80.970 late Monday.
