* U.S. stocks mostly lower after disappointing U.S. GDP
* Oil falls back around $103
* Bank of Japan confirms commitment to bold policy
By Leah Schnurr
NEW YORK, April 26 (Reuters) - The U.S. dollar tumbled against the yen on Friday after the Bank of Japan left its monetary policy unchanged, while benchmark U.S. bond yields fell to near 4-1/2-month lows after the U.S. economy grew less than expected in the first quarter.
The disappointing growth rate spurred concerns about a tepid outlook for the United States, which along with recent concerns that China's growth is slowing, also hit the price of oil. Brent crude dipped below $103 a barrel after rising $3 in the past two sessions.
China and the United States are the world's two largest oil consumers.
The BoJ held off from announcing new monetary policy on Friday, which was not unexpected, but board members suggested inflation may still fall short of the central bank's target for some time. The outlook on inflation in the bank's semi-annual economic report highlighted concerns that the BoJ has an unrealistic goal in its battle to end 15 years of deflation.
The BoJ's announcement in early April of plans for $1.4 trillion in new monetary stimulus triggered a sharp selloff in the yen. However, traders said market expectations for ongoing weakness in the yen had come too far, too quickly. Recent lackluster U.S. data has added to dollar selling, which accelerated on Friday.
"The selling started to feed on itself, and everyone started to jump on the selling bandwagon," said Charles St-Arnaud, foreign exchange strategist at Nomura Securities in New York.
The dollar fell as low 97.54 yen and was recently down 1.4 percent at 97.88.
U.S. gross domestic product expanded at a 2.5 percent annual rate in the first quarter. While that was a jump from the tepid growth seen in the final quarter of last year, it disappointed expectations for a 3 percent pace.
The declines on Wall Street lifted bond prices, with 30-year Treasuries up nearly 1 point at 105-08/32 to yield 2.862 percent.
The benchmark 10-year note's yield fell to 1.665 percent, just a shade higher than the low of 1.643 percent reached earlier in the week.
The data could raise doubts about the ability of the economy to absorb government spending cuts and higher taxes and may fuel speculation of the possibility of more Federal Reserve measures to boost growth, or at least keep the Fed's current stimulus plans in place.
Wall Street was lower by midday following the economic data. If losses are maintained for the day, the S&P 500 would snap a five-day winning streak.
"What we are going to do is just average the fourth quarter and the first quarter and take a look and see the economy is growing way underneath its potential growth rate," said John Canally, investment strategist and economist for LPL Financial in Boston.
The Dow Jones industrial average edged down 8.49 points, or 0.06 percent, at 14,692.31. The Standard & Poor's 500 Index slipped 6.76 points, or 0.43 percent, to 1,578.40. The Nasdaq Composite Index lost 19.56 points, or 0.59 percent, to 3,270.43.
Investors in European equities were also taking a breather after five days of gains. Europe's top shares on the FTSEurofirst 300 closed down 0.35 percent, and world shares were off 0.3 percent.
A growing belief that the European Central Bank will react to the recent deterioration in the euro zone's economy by cutting interest rates next Thursday helped European stocks rise this week, pushed the euro to a three-week low and contributed to a fall in bond yields.
A gloomy new set of surveys from the ECB further supported those rate cut calls, as they underscored the slowdown in lending and the difficulties companies in the bloc are facing to get credit.
Brent fell $1.09 to $102.32 a barrel, while U.S. crude was down $1.42 at $92.22.