The Canadian dollar was down 0.15 of a cent to 100.68 cents US.
The Bank of Japan began a two-day policy meeting amid pressure from the country's new government to take more aggressive steps to fight the long deflationary slump in the world's third-largest economy.
Some analysts expect the bank to expand its asset-purchasing program and set an inflation target.
The "Bank of Japan monetary policy decision could be a big moment for the country," said Colin Cieszynski, senior market analyst for CMC Markets Canada in a note.
"In recent weeks, (the yen) has been selling off and the Nikkei has been soaring on anticipation that the new government would get its way. Today the two markets are reversing course, suggesting either that traders expect the Bank of Japan won’t go far enough or that significant stimulus has already been priced in and that some are already starting to take profits."
In commodities, benchmark oil for February delivery was off a four-month high, down nine cents to US$95.47 a barrel in electronic trading on the New York Mercantile Exchange.
February gold bullion rose $2.70 to US$1,689.70 an ounce while copper prices were down.
Meanwhile, Statistics Canada reported that wholesale sales rose 0.7 per cent in November to $49.6 billion, largely as a result of higher sales in the computer and communications equipment and supplies industry. The agency says sales were up 0.5 per cent in volume terms.