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Yen surges on reports of hawkish tone from BOJ

surged against the U.S. dollar on Thursday morning on a report that the country's central bank is cooling to the idea of further stimulus to its current policy program.

The dollar was trading at 119.0 against the Japanese currency at around 8:30 a.m. GMT, after falling sharply by around 1 percent. The greenback had started the session at 120.45 against the yen.

Despite several years of quantitative easing (QE) in Japan - aimed at kickstarting an economy that has faced years of low inflation - the fresh comments from the Bank of Japan hinted at the possibility of a policy change.

A report from Bloomberg - citing people familiar with the matter - said that Bank of Japan policymakers believe extra stimulus would be a counterproductive step for now.

The yen's surge eased slightly by 9:00 a.m. GMT with the report appearing to not show a consensus view for the central bank. The report added that there were concerns that further easing, and thus further declines in the yen, could damage confidence.

Yuirko Nakao | Bloomberg | Getty Images

Kit Juckes, global head of foreign exchange strategy at Societe Generale, told CNBC via email that the comments go against a general assumption that the BOJ will continue to ease.

"Anything that suggests (the BOJ) is OK with the yen here, and don't want it still weaker, likely means that is appreciates," he said.

"BOJ policy isn't quite so extraordinarily easy relative to the rest of the world as it was."