The Japanese yen steeply dropped on Tuesday after the central bank halted its not favorable interest rate policy, while the Australian dollar declined as domestic rates muted.

In light of the country's first interest rate increase in seventeen years, the central bank of Japan announced that it will set its new policy rate, the overnight call rate, at a range of zero to 0.1% and that it expected "accommodative financial conditions" to persist for the foreseeable future.

Because of the continued widening interest rate differences between Japan and the US, the yen is expected to remain under pressure.

The dollar index that gauges the greenback versus its major pairs advanced to two weeks high at 103.82.

EUR/USD slumped at $1.08625

GBP/USD dipped 0.2% to $1.2703.

The yen muted at 150.39 and versus the euro, the yen also plunged over 0.7% to bottom at 163.425, its slowest level in three weeks.