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The yen languished near a four-month low against the U.S. dollar and a 16-year trough against the euro on Wednesday, a day after the Bank of Japan's widely anticipated decision to end its negative interest rate policy.

While the Bank of Japan ushered in the country's first rate hike in 17 years, the central bank said it expected to maintain accommodative conditions for the time being, keeping pressure on the yen as U.S.-Japanese rate differentials remain stark.

On Wednesday, the yen weakened to a four-month low of 151.34 per dollar and was last off 0.30% at 151.28, with the multi-decade low of 151.94 within sight. The Asian currency fell 1% on Tuesday after the BOJ decision as most investors had already priced in a change.

Against the euro, yen weakened to 164.35, its lowest since 2008, while against the pound, yen weakened to 192.37, lowest since 2015. Japan markets are closed on Wednesday for a holiday.

"I think the focus is again around 152 levels," said Christopher Wong, currency strategist at OCBC. Wong said the move for dollar/yen in the near term will be more a function of U.S. rates, with the Federal Reserve decision due later on Wednesday.

In a historic shift from decades of massive monetary stimulus, the Japanese central bank on Tuesday ended eight years of negative interest rates and other remnants of unorthodox economic policy.

Daniela Hathorn, senior market analyst at Capital.com said BOJ Governor Kazuo Ueda’s dovish comments after the meeting were enough to end any post-decision bullish sentiment in the Japanese currency.

"The carry trade versus the major currencies continues to be in play and is expected to continue for a while," Hathorn said. "This means the yen is likely to see further weakness, especially if the other central banks continue to delay cutting rates."

The main spotlight for the day remains on the Fed and although the central bank is not expected to move, its economic projections and comments from Chair Jerome Powell will be in focus.

Last week's stronger than expected inflation reports led traders to reduce their bets on rate cuts this year, with markets now pricing in 73 basis points (bps) of easing this year. At the start of the year, traders were pricing in 150 bps of cuts.

Traders are pricing in a 59% chance of the Fed starting its easing cycle in June, the CME FedWatch tool showed, sharply lower than earlier expectations.

The dollar index, which measures the U.S currency against six rivals, rose to 0.019% to 103.87. The euro was down 0.03% to $1.0862.

The Australian dollar eased 0.08% to $0.652, while the New Zealand dollar fell 0.17% to $0.604.

Australia's central bank held interest rates steady on Tuesday as expected, while watering down a tightening bias to say that it was not ruling anything in or out on policy.