China's yuan slipped to near seven-month lows on Friday, in line with the yen's losses after the Bank of Japan decided to keep its easy monetary settings unchanged in its latest policy review.

The yen's weakness has been weighing down Asian currencies in recent months and investors were closely watching the latest BOJ meeting decision for any hint that it would further withdraw its monetary stimulus.

But the Japanese central bank adopted a cautious stance, maintaining the current pace of its bond purchases and committing to laying out a tapering plan at its next meeting in July, suggesting it will take its time in embarking on quantitative tightening.

Prior to the market open, the People's Bank of China set the midpoint rate, around which the yuan is allowed to trade in a 2% band, at 7.1151 per U.S. dollar, the weakest level since January 19.

China's central bank has to "walk this fine line, given some of the external issues, especially a strong dollar and depreciating pressures it brings to the broad Asian region," said David Chao, global markets strategist for Asia Pacific at Invesco.

In the spot market, the onshore yuan opened at 7.2550 per dollar and briefly hit 7.2553, the lowest level since November 16, 2023.

The yuan was changing hands at 7.2552 at midday, 29 pips softer than the previous late session close.

The currency is down 2.2% this year, pressured by its relative low yields versus other currencies and a persistent weak property market.

The global dollar index remained steady around 105.3. The offshore yuan was trading at 7.2720 per dollar. (Reporting by Summer Zhen Editing by Shri Navaratnam)