[SINGAPORE] Asian shares slipped after touching a near one-year peak on Friday, while Japanese stocks tumbled and the yen strengthened as the Bank of Japan's fresh stimulus measures disappointed markets.
European markets are set to be positive, with futures pointing to a flat start for Britain's FTSE 100, and higher opens for Germany's DAX and France's CAC 40 .
The BOJ doubled purchases of exchange-traded funds, but maintained its base money target at 80 trillion yen (S$1 trillion) and the pace of purchases of other assets, including Japanese government bonds.
The central bank also held at 0.1 per cent the interest it charges to a portion of excess reserves financial institutions leave with the central bank, while saying it would thoroughly assess the effects of negative interest rates and its asset buying program.
"The fact that the Bank of Japan eased policy is acknowledged, but it was just ETF buying, and the overall impression was that it was not enough and investors were disappointed," Takuya Takahashi, a strategist at Daiwa Securities, said.
"ETF buying has a direct positive impact on the stock market but its decision to hold off bond buying hit the dollar-yen."
Japan's Nikkei, which swung between gains and losses after the announcement, recovered to trade up 0.6 per cent.
The index, which touched a seven-week high last week, was on track for a 0.4 per cent weekly drop, but a gain for July of 6.4 per cent.
The dollar weakened 1.5 per cent to 103.67 yen, its biggest one-day decline since June 24, after the UK's decision to leave the European Union.
Before the BOJ's decision, many investors warned of a big chance of disappointment because markets have long expected more stimulus, making it difficult for BOJ Governor Haruhiko Kuroda to spring a surprise.
MSCI's broadest index of Asia-Pacific shares outside Japan pulled back 0.4 per cent after hitting the highest level since Aug 11, leaving it on track for gains of 0.9 per cent for the week, and 5.4 per cent for the month.
Wall Street shares remained near all-time highs, with tech heavyweights Alphabet and Amazon rising after the bell as their earnings beat expectations .
The stronger yen also weighted on the dollar index, which slipped 0.3 per cent to 96.425, putting it on track for a slide of 0.5 per cent for the week, but a gain of 0.3 per cent for the month.
European shares fell on Thursday, as markets awaited the release of the stress test results on European banks on Friday night.
The euro climbed 0.1 per cent to US$1.1084. It is up 1 per cent this week, but poised for a 0.2 per cent loss in July.
Elsewhere in markets, oil prices fell to fresh three-month lows, with US benchmark now down more than 20 percent from this year's peak on growing worries that the world might be pumping more crude than needed.
US crude futures fell to as low as US$40.95 per barrel and were last down 0.5 percent at US$40.92. It's set for a drop of 7.5 per cent for the week and 15.4 per cent in July.
International benchmark Brent crude futures dropped 0.6 per cent to US$42.45. It is down 7 per cent this week and 14.6 per cent this month.
"Investors have become overly bearish on oil as US production and gasoline inventories continue to rise. We think those concerns are unwarranted. Underlying demand in the US remains robust," ANZ bank said.