The BOJ doubled its inflation target to 2 percent, to be achieved as soon as possible, and adopted an open-ended commitment to buy assets.
The Aussie hit a high of 94.87 yen in immediate reaction to the BOJ's decision, coming within reach of a 4-1/2 year high of 95.02 set Friday. But that was swiftly followed by a vicious reversal that saw it fall 0.5 percent to 93.88.
Similarly, the kiwi climbed to 75.61 yen, also nearing a 4-1/2 year peak of 75.80 set last week, before pulling back to 74.86 by late trade.
Traders said the wild swings had to do with position adjustments as the market had been heavily short of yen into the announcement. However, many suspected any short-term rise in the yen could represent selling opportunities.
"It's a significant improvement over the close-ended quantitative easing that the Bank of Japan has done in the past and has continued through this year," said Tim Condon, economist at ING in Singapore.
"Markets, I think, would reprice in anticipation of the more accommodative stance in 2014. I think that means dollar/yen moves higher."
Any boost to the Japanese economy should have a positive impact on Australia as it is the country's second largest export market. It would also tend to support global growth, commodity prices and risk appetite.
Against the greenback, the Aussie edged up 0.3 percent to $1.0553, while the kiwi put on 0.6 percent to $0.8409 .
Traders said the kiwi was underpinned by a wave of short-covering triggered after the euro fell below NZ$1.5880 .
New Zealand government bonds were mixed with longer-dated debt outperforming their short-dated counterparts, flattening the yield curve.
Australian bond futures were barely changed. The three-year bond contract was steady at 97.240, and the 10-year contract rose 0.005 points to 96.670.