TOKYO -- Japan's five-year, 43 trillion yen defense buildup risks being undermined by a weak yen that has cut roughly 30% off the dollar value of this spending in the past 18 months.

The Japanese yen and bond yields fell on Friday as the Bank of Japan opted to wait a month before telling the market how it will reduce its purchases of bonds.

In a decision seen as a step toward monetary tightening, the bank said it would reduce the amount of monthly government bond purchases, as it left its policy interest rate unchanged.

The Japanese yen exchange rate paired with the US dollar looks unimpressive by the end of this week. The USD/JPY pair rose to almost 158.00 immediately after the end of the June meeting of the Bank of Japan, which left the interest rate unchanged. Everything went according to expectations.

The Bank of Japan said on Friday it would start trimming its huge bond purchases and announce a detailed plan next month on reducing its nearly $5 trillion balance sheet, taking another step toward unwinding its massive monetary stimulus.