The U.S. dollar surged against the yen on Monday, topping the 125 yen line for the first time since August 2015, after the Bank of Japan announced an emergency bond-buying operation, while the Nikkei stock index ended lower, snapping a nine-day winning streak.

The dollar rose sharply from the lower 122 yen range in the morning after the BOJ's operation increased expectations of a widening interest rate gap between the United States and Japan.

The U.S. currency eclipsed the 125 yen mark in the evening. At 6 p.m., the dollar fetched 124.68-69 yen compared with 122.05-15 yen in New York and 121.73-75 yen in Tokyo at 5 p.m. Friday.

The euro was quoted at $1.0990-0992 and 137.02-06 yen against $1.0976-0986 and 134.14-24 yen in New York and $1.1022-1024 and 134.17-21 yen in Tokyo late Friday afternoon.

The BOJ's offer in the morning and the afternoon to purchase an unlimited amount of the 10-year Japanese government bonds at a fixed rate came as the yield neared the upper target set by the central bank of around 0.25 percent late last week.

But the yield on the 10-year bond rose 0.015 percentage point from Friday's close to 0.250 percent, its highest closing level since January 2016, tracking a rise in U.S. Treasury yields.

Market participants sought the dollar on the back of contrasting approaches by the BOJ and the U.S. Federal Reserve, which decided this month to raise key interest rates for the first time since 2018 and signaled six more rate increases this year to tame high inflation.

"The BOJ announced an exactly opposite policy from the Fed. Investors bought the dollar as the BOJ showed a strong commitment to keeping powerful monetary easing," said Takuya Kanda, senior researcher at the Research Institute.

The Japanese central bank drew no bids in the morning to purchase the bonds at a fixed rate of 0.25 percent, but accepted bids to purchase 64.5 billion yen ($520 million) in the second offer.

The BOJ said it will conduct the emergency operation for three more days through Thursday.

A weaker yen enables exporters to earn more if they repatriate overseas profits and helps to sharpen the competitiveness of Japan-made products abroad, but it will likely lead to higher energy and food prices in the country, squeezing households.

Chief Cabinet Secretary Hirokazu Matsuno told a press conference that rapid currency moves are "not desirable," and that the government will keep tabs on movements in the currency markets and their impact on the Japanese economy.

The 225-issue Nikkei Stock Average ended down 205.95 points, or 0.73 percent, from Friday at 27,943.89. The broader Topix index of all First Section issues on the Tokyo Stock Exchange finished 8.1 points, or 0.41 percent, lower at 1,973.37.

Stocks lost ground from the outset as investors secured profits on technology issues and other major gainers after the benchmark Nikkei index rose about 3,000 points over nine trading days through Friday.

But the market trimmed losses later as export-related shares advanced after the dollar rose sharply against the Japanese currency.

On the First Section, declining issues outnumbered advancers 1,275 to 795, while 111 ended unchanged.

Decliners were led by nonferrous metal, marine transportation and service issues.

Semiconductor equipment maker Tokyo Electron declined 830 yen, or 1.3 percent, to 62,660 yen, after the Nikkei heavyweight surged about 10,000 yen over seven days through Friday.

Among major exporters, Toyota Motor rose 13.0 yen, or 0.6 percent, to 2,202.0 yen, and Nissan Motor advanced 9.6 yen, or 1.8 percent, to 540.1 yen.

Trading volume on the main section fell to 1,110.24 million shares from Friday's 1,186.85 million.