For the first time since 1990, the Japanese yen weakened to 160 against the US dollar.

Japanese yen It weakened to $160 against the US dollar in Monday morning trade in Asia.

The yen briefly touched 160.03 against the dollar, its weakest level since April 1990, when it hit 160.15, according to FactSet data.

The currency declined along with continued strength in the greenback as expectations of a Federal Reserve rate cut retreated. The Fed’s favorite inflation gauge came up a bit. hotter than expected highlighting friday The US central bank is facing difficulties In dealing with sticky inflation.

The yen has been trading at or below 150 against the dollar since the Bank of Japan Ended its negative interest rate regime in March. central bank on friday held rates And slightly raised its inflation expectations for fiscal 2024.

At a press conference on Friday, BOJ Governor Kazuo Ueda said exchange rate fluctuations would only affect monetary policy if there was a “significant” impact on the economy, according to a Reuters translation of his comments.

“If the yen’s moves have an impact on the economy and prices that is difficult to ignore, that could be a reason to adjust policy,” Ueda said, according to a Reuters translation.

Japanese officials have repeatedly said Warned against “excessive” measures in yen, but has made no official announcement about strengthening the currency. Some market observers were skeptical that authorities would intervene at the 155 level, but the yen declined. passed that mark last week,

Vincent Chung, associate portfolio manager of T. Rowe Price’s diversified income bond strategy, said executives are more focused on currency volatility rather than specific levels.

“The current pace of depreciation is lower than through 2022, so the intervention response may be less intense,” Chung said, adding that options pricing suggests the market anticipates intervention could come after the BOJ’s May meeting. .

Other experts have made similar comments, telling CNBC there’s nothing magical about it.line in the sand“For yen intervention. Last week, Frederick Neumann, HSBC’s chief Asia economist and co-head of global research in Asia, said the more important thing is to monitor how the yen weakens.

The economist said if the yen sees a “steady devaluation,” there may not be much resistance from Japanese authorities.

Jasper Cole, expert director of investment advisory firm Monex Group, predicted that Japanese authorities will take action if the yen rises by more than 3-5 yen in 12 hours, that is, when it hits a real speculative attack.

Speaking shortly after the yen hit 160 on Monday, Cole said any intervention would be “a waste of Japan’s national wealth” as the country sells its US dollars to buy the yen. Cole said that if nothing fundamentally changes, the yen could weaken by 200-220 against the greenback.

For speculators, Cole said the intervention is “freeing liquidity” and will remain so until the Fed signals that a rate cut is on the table again, causing the US dollar to weaken, or if the USDA signals That domestic demand-pull inflation should be controlled.

Still, T. Rowe Price’s Chung said the yen’s weakness “has had a positive impact on stock performance, encouraged corporations to raise wages, and kept the country on track to meet the Bank of Japan (BoJ)’s 2% inflation target.” Has taken it closer.”

Japanese markets are closed on Monday for a public holiday.