USD/JPY hit 121.40 during late Asian trade, the pair's highest since December 21; the pair subsequently consolidated at 120.73, jumping 1.62%.
The pair was likely to find support at 118.53, the session low and resistance at 121.55, the high of December 21.
At the conclusion of its monetary policy meeting on Friday, the BOJ said it was adopting a negative interest rate of minus 0.1% and added that it will cut interest rates further into negative territory if necessary.
The central bank's decision came as it struggles to reach its 2% inflation goal amid ongoing concerns over global economic growth and plummeting oil prices.
Meanwhile, investors began to eye the release of revised U.S. fourth quarter growth data due later in the day, after the Federal Reserve gave no indications on the pace of future interest rate hikes in its policy statement on Wednesday.
The Fed left interest rates on hold at the conclusion of its two-day policy meeting, after raising interest rates for the first time in nearly a decade in December.
The U.S. economy is still on track for moderate growth and a stronger labor market even with "gradual" rate increases, the bank said.
Separately, the dollar had weakened after data on Thursday showed that U.S. pending home sales rose less-than-expected last month, while durable goods orders dropped far more-than-anticipated in December.
The yen was also sharply lower against the euro, with EUR/JPY rallying 1.18% to 131.50.