Investors shrugged off expectations for big, bold stimulus from Japan's central bank on Thursday, as the yen managed to cling onto near one-month highs against the U.S. dollar.
The currency last traded at the 93 handle against the dollar, just 0.5 percent shy from Tuesday's near one-month high of 93.5 as market participants turn skeptical if the Bank of Japan (BOJ) can deliver on its promises of open-ended asset purchases.
(Read More: Will Japan's Central Bank Deliver or Disappoint?)
"I think they (BOJ) will disappoint. They're not going to move as fast as the market would like. Kuroda has to deal with a board that was appointed by the previous government and we know that this board is not inclined to step up monetary easing a lot," said Richard Martin, managing director at IM Asia on CNBC's "The Call."
Dollar/Yen Six-Month Chart
Views like these have led the currency to steadily accelerate ever since March 12, when it hit a three-and-a-half year low of 96.7 against the greenback.
"At this point, rhetoric is not going to be enough to push dollar-yen to the upside. They're really going to have to dramatically increase their QE (quantitative easing) program and right now, that's an open question. So, that's why you see dollar-yen struggling ahead of the release," said Boris Schlossberg, managing dirctor at BK Asset Management on CNBC's "Asia Squawk Box."
Markets are currently expecting the central bank to start open-ended asset purchases immediately and any disappointment could put an end to profits that yen bears have been reaping in recent months.
The currency has plunged 15 percent since mid-November, fueled by hopes for Bernanke-style aggressive quantitative easing.
"If action doesn't follow or doesn't work in coming months, expect some of the recent market changes to reverse," wrote Paul Gambles, managing partner at financial advisory firm MBMG in a note.
The yen's appreciation on Thursday further added pressure on major exporter stocks, and spurred a 1.7 percent sell-off in the Nikkei.
Nissan and Isuzu Motors fell over 2 percent while Canon slumped 4.5 percent.
If the currency does continue its current pace of acceleration, investors can expect more steep losses ahead for the Nikkei, which is currently off more than 4 percent from last month's four-and-a-half-year peak.