Sheets of newly designed Japanese 10,000 yen banknotes pass through a machine at the National Printing Bureau Tokyo plant in Tokyo, Japan, Wednesday, June 19, 2024. The yen's continued weakness has raised concerns that a rebound in costs will fuel inflation, likely weighing on private consumption.
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The Japanese Yen hit a nearly 38-year low against the US dollar late Wednesday, raising expectations that authorities could again intervene in currency markets.
The yen weakened to 160.82 against the dollar, surpassing the previous record high of 160.03 on April 29 and hitting its weakest level since 1986, according to FactSet data.
The last time the yen breached the 160 level, the currency strengthened sharply during the trading session, prompting analysts to speculate about an intervention.
Japan's finance ministry confirmed the intervention later in May, saying it had spent 9.7885 trillion yen ($62.25 billion) on currency interventions between April 26 and May 29, according to a statement translated by Google.
That was the first time the Japanese government has taken such a market measure since October 2022, according to ministry data.
Carol Kong, economist and currency strategist at the Commonwealth Bank of Australia, believes “we may be closer to another currency intervention.”
She also said that US personal consumption expenditures data for May, due to be released on Friday, could be a catalyst for Japan to intervene if it comes in stronger than expected and pushes the USD/JPY pair sharply higher.
Kong noted that the yen's continued decline prompted this Masato Kanda, Japan's top currency diplomat, is to step up his warnings.
Reuters reported that Kanda said Japanese authorities were “deeply concerned and on high alert” about the yen's rapid decline.
“It is widely accepted that the current weakness of the yen is not necessarily justified and is therefore likely caused by speculators,” Kanda told reporters on Wednesday, adding that authorities were “preparing to crack down on excessive volatility.”
— CNBC's Ruxandra Iordache and Sam Meredith contributed to this report.
