The Japanese yen fell to a 16-year low against the euro on Wednesday as the Bank of Japan indicated that monetary policy would remain loose even after shifting out of its negative interest rate environment.

The unit hit 164.48 per euro -- its weakest since 2008 -- as the difference between European Central Bank rates and the BoJ remained wide enough to prevent traders shifting their focus to Japan.

The bank announced the rate hike on Tuesday -- the first in 17 years -- along with the scrapping of its control of bond yields and the purchase of risk assets as it moved away from years of its ultra loose monetary policy.

However, the yen felt no benefit from the move, which was considered dovish by observers, as it had been widely expected and the bank's boss said that he was in no rush to ramp up borrowing costs further.

Analysts also pointed out that while inflation had remained above the bank's two percent target for almost two years, the move came as the economy remained fragile and the outlook uncertain.

Other central banks including the US Federal Reserve are still to begin cutting rates as inflation in the West remains sticky.

The yen weakened to more than 151 per dollar on Wednesday, having been around 149.3 before Tuesday's decision.

The "yen is underperforming as markets interpreted the BoJ decision as a dovish hike", Alex Loo, of TD Securities, said.

"We could see a convincing break above 165 (per euro) on better eurozone data."