Kazuo Ueda is allegedly in line to become the next governor of the Bank of Japan (BOJ), which shored up the yen on Friday. However, the yen's gains were short-lived after Ueda declared the BOJ's monetary policy to be suitable.

Nikkei had previously reported that the government would nominate academic Ueda to the BOJ's top job, sending the yen surging across the board as markets anticipated a possible earlier end to ultra-loose monetary policy.

The greenback slipped as much as 1.2% to 129.8 yen before falling last by 0.5% to 130.93 yen.

The BOJ surprised the markets in December by expanding the range it would allow above or below its aim of zero and raising the cap on 10-year government bond yields from 0.25% to 0.5%.

Despite the BOJ's decision to forgo any adjustments at its most recent meeting, speculation has increased that it may revise or abandon its yield curve control policy.