The Bank of Japan Thursday announced a strong monetary easing campaign that sent the Japan markets soaring high, while the yen slipped over 1 percent against the dollar.

The aggressive monetary easing program is the first important measure taken by the newly appointed BOJ Governor Haruhiko Kuroda, who has vowed to pull the world’s third largest economy from a two-decade-long deflation.

The key measures announced at Kuroda’s inaugural policy-board meeting include an expansion of government bond purchases and buying of long-term debt, besides shifting its target when setting monetary policy to base money from the current overnight call rate, Reuters reported.

The central bank also said it will advance the timing of open-ended asset buying and extend the duration of government bonds it buys in its easing program, along with heavy investments in REITs (real estate investment trust) and ETFs (exchange traded funds).

"This is the kind of aggressive easing we are used to seeing from the Fed, and would just love to see more of from the ECB," Kit Juckes, a currency analyst at Societe Generale, said in a research note.

Markets reacted sharply to the announcement as Japan's Nikkei stock average pared earlier losses and closed 2.2 percent higher, while the benchmark 10-year Japanese government bond futures rose to a record-high and the yield fell to 0.490 percent, its lowest level since June 2003.

The dollar gained more than 1 percent to rise above 94 yen and the euro also soared over 1 percent to around 121 yen.

The markets were anticipating strong monetary easing measures from Kuroda, who is targeting to achieve an inflation target of 2 percent in two years. All of the 10 economists polled by Dow Jones Newswires had predicted the launch of monetary easing measures at the latest BOJ meeting.

"The measures announced overall were bold, and more than what had been expected for," Hiroshi Maeba, head of FX trading Japan for UBS in Tokyo told Reuters, adding that the dollar's rise was partly due to the fact some players had trimmed yen short positions before the meeting.

"All in all, the BOJ's steps today were enough to prompt those shorting the dollar to unwind their positions. Whether the dollar will rise further will depend on how overseas players respond to the BOJ's moves and on the U.S. nonfarm payrolls due on Friday," he said.