FOREX-Dollar set for worst week against yen since 2008

* Dollar set to decline about 4 percent in week vs yen

* Yen hits 18-month high vs dollar on BOJ inaction

* Euro boosted by euro zone growth data

* Month-end rebalancing in wake of Fed meeting hurts dollar (Updates prices, adds comments; changes byline, dateline, previous LONDON)

By Sam Forgione

NEW YORK, April 29 (Reuters) - The U.S (Other OTC: UBGXF - news) . dollar was on track for its biggest weekly percentage decline against the yen since the 2008 financial crisis in the aftermath of the Bank of Japan's decision not to ease policy further, while strong euro zone growth data boosted the euro.

The dollar was last down 0.69 percent against the yen at 107.35 yen on Friday after hitting an 18-month low of 106.92. The dollar was last down about 4 percent against the yen for the week, putting it on track for its biggest weekly loss since October 2008.

The dollar also tumbled against the euro, with the euro hitting its highest against the dollar in two and a half weeks, at $1.1447. The euro was last up 0.75 percent against the dollar at $1.1436.

The dollar index, which measures the greenback against a basket of six other major currencies, hit an eight-month low of 93.112 and was last down 0.7 percent at 93.135.

Analysts said the yen continued to surge in the aftermath of the BOJ's decision to hold monetary policy steady on Thursday in the face of soft global demand and a sharp rise in the yen, defying expectations for increased stimulus to fight deflation.

"It (Other OTC: ITGL - news) 's just a continuation of momentum after the BOJ policy announcement," said Vassili Serebriakov, currency strategist at BNP Paribas (LSE: 0HB5.L - news) in New York. He said the dollar could weaken to 105 yen before June, when he said the BOJ would likely step in with increased stimulus.

Analysts said preliminary data on Friday showing growth in the euro zone economy accelerated more than expected in the first quarter boosted the euro, while data showing U.S. inflation barely rose in March as consumer spending remained tepid weakened the dollar on the margin.

The European Union's statistics office Eurostat said gross domestic product in the 19 countries sharing the euro rose 0.6 percent quarter-on-quarter in the January-March period, while the U.S. Commerce Department said the personal consumption expenditures price index edged up 0.1 percent last month after an upwardly revised 0.2 percent increase in February.

Mom and pop investors were also likely rebalancing portfolios ahead of month-end and selling the dollar in the wake of the Federal Reserve's policy statement from Wednesday, said Greg Anderson, global head of FX strategy at BMO Capital Markets in New York.

The Fed's statement was viewed as largely dovish, with the U.S. central bank being in no rush to hike interest rates again. (Reporting by Sam Forgione; Additional reporting by Patrick Graham in London; Editing by James Dalgleish)