(Reuters) -The yen fell to its weakest level against the dollar since 1990 on Wednesday, with markets on alert for signs of intervention by Japanese authorities to support their currency.
The dollar hit a high of 155.17 yen, the strongest since 1990, before falling back into choppy trading, a sign of market nervousness around the 155 level. The last one stood at 154.97, an increase of 0.09%.
The yen’s decline comes after a string of strong U.S. inflation data pushed the dollar to a five-month high and boosted expectations that the Federal Reserve is unlikely to rush to cut rates this year.
The decline of the yen against the dollar has revived expectations for currency intervention. Japanese Finance Minister Shunichi Suzuki and other policymakers have said they are closely monitoring currency movements and will respond if necessary.
The strong dollar also prevailed at the spring meetings of the International Monetary Fund and the World Bank in Washington, with the United States, Japan and South Korea issuing a rare joint statement on the issue.
Speaking after the Group of 20 (G20) financial leaders meeting in Washington, Bank of Japan Governor Kazuo Ueda said Japan’s central bank could raise interest rates again if interest rate declines slow inflation increase significantly. In doing so, he underlined the dilemma that the weak currency has become for policymakers.
The Bank of Japan wraps up its latest policy meeting on Friday.
