The yen fell on Wednesday to the weakest level since 1986, fanning speculation authorities may be soon be forced to support the currency again in a bid to stem the biggest depreciation in the developed world.
The Japanese currency fell as much as 0.4% to ¥160.39 per dollar, blowing past levels that last led officials to intervene in the market in April. The yen has weakened more than 12% this year, raising the price of imports, hurting Japanese consumers and causing growing unease among businesses.
The vast gap between interest rates in Japan — where borrowing costs remain near zero — and the U.S. has kept pressure on the yen despite attempts contain the slide. The next big pain point may emerge from a readout on the Federal Reserve’s favored U.S. inflation gauge on Friday, which is key to the outlook for monetary policy.