* BOJ increases asset purchases more than expected * Euro slips vs yen, gains vs dollar * U.S. housing data shows signs of recovery NEW YORK, Sept 19 (Reuters) - The Japanese yen gained across the board on Wednesday, recovering from earlier losses incurred after the Bank of Japan eased monetary policy more than expected, as investors saw the announcement as less aggressive than plans by other central banks. The yen initially fell to a one-month low against the U.S. dollar as the BOJ's decision, following in the footsteps of recent action by other major central banks, encouraged investors to take on more risk, also pushing the euro higher against the dollar. But the yen recovered as investors looked at the BoJ announcement against events and risk elsewhere in the world. The BOJ increased asset purchases by 10 trillion yen ($127 billion), almost double what some had expected, but it was perceived as not as aggressive as central banks elsewhere as investors debated the announcement. The Federal Reserve made an open-ended pledge last week to buy U.S. mortgage-backed securities until the job market in the world's largest economy improves substantially. Meanwhile, the European Central Bank plans to buy "unlimited" amount of government bonds of indebted euro zone states. "First the European Central Bank, then the Federal Reserve and now the Bank of Japan: all are implementing massive easing policies to try to help their respective economic jurisdictions recover," said Christopher Vecchio, Currency Analyst at DailyFX. "But there is one main difference: the ECB's and the Fed's plans are unlimited in nature, with the Fed's likely to be more effective at depreciating the U.S. dollar given the unsterilized nature of the program, while the BoJ's is capped at a paltry 10 trillion yen," he added. After the BOJ decision, the dollar initially jumped to 79.21 yen, its highest since Aug. 22. But it last traded at 78.33 yen, down 0.6 percent on the day. The timing of the BoJ's move was somewhat of a surprise relative to market expectations, according to Vassili Serebriakov, currency strategist at Wells Fargo in New York. "The yen fell initially, but subsequently managed to recoup most of these losses," he said. "Meanwhile, markets are increasingly questioning the next European policy moves, and in particular, the possibility of the Spanish government requesting financial aid." Accommodative global monetary conditions are supportive for most commodity and emerging currencies, Serebriakov noted. A repeat of the yen's sharp fall in February-March in the wake of surprise easing by the BOJ was seen as unlikely as analysts said both the ECB and the Fed are viewed as having eased more aggressively. "The real test for dollar/yen is whether the current move can carry it above 80 yen," said Niels Christensen, currency strategist at Nordea in Copenhagen. "I think it will run out of steam as you need very good numbers out of the U.S. and risk appetite to maintain pressure on the yen." The yen was up 0.5 percent against the Canadian dollar and the Swiss franc, and 0.7 percent against the pound. BOJ Governor Masaaki Shirakawa said Japan's economic recovery may be delayed by six months due to a prolonged slowdown in global growth. Risk aversion abated somewhat after U.S. housing data showed the pace of home resales rose in August to its fastest in over two years and groundbreaking on new homes also climbed, hopeful signs that a budding housing market recovery is gaining traction. EURO SLIPS The euro erased earlier gains against the yen. The single currency was last down 0.5 percent on the day at 102.30 yen, well below an earlier high of 103.63 yen. Against the dollar, the euro last traded at $1.3056, up 0.1 percent on the day. Given that the euro had rallied some 9 percent since late July, traders said the pullback reflected some caution as markets wait to see whether Spain would apply for aid and trigger the ECB's bond-buying program. While many market players expect Spain eventually to ask for a bailout, some say investors' patience could be tested as Madrid is likely to resist tough conditions which some northern euro zone countries would want imposed in return for any aid. Spain's Deputy Prime Minister Soraya Saenz de Santamaria said on Tuesday the government was still considering the terms of a bailout. The euro was expected to remain broadly in favor, however, as the ECB's plans to tackle the debt crisis have encouraged investors to pare aggressive short positions.