Tokyo: The yen remains on a downtrend despite fears of possible currency market intervention by Japanese authorities, and its fall past the 150 mark against the dollar has come in sight.

Reflecting widening interest rate gaps between Japan and the United States, the yen dived past 148.50 per dollar in overseas trading on Friday, hitting fresh 32-year lows.

The yen traded around 115 versus the dollar late last year, and it has weakened some 22 pct so far this year.

If the Japanese currency hits 150, that would be the first time since August 1990.

The yen’s persistent weakness against the dollar is backed by high inflation in the United States.

The U.S. consumer price index for September, released Thursday, rose faster than market expectations, reinforcing the view that the U.S. Federal Reserve will maintain its aggressive monetary tightening stance.

As the data highlighted the policy direction difference between the Fed and the Bank of Japan, which sticks to its easing policy, the yen slipped below the August 1998 low of 147.64 soon after the release of the data.

In the week through Friday, the yen depreciated by more than 3 per dollar.

The market is now paying attention to whether the Japanese government and the Bank of Japan will conduct yen-buying intervention again after they did so on Sept. 22.

Speaking to reporters in Washington on Friday, Masato Kanda, Japan’s vice finance minister for international affairs, suggested that the government and the BOJ will not hesitate to intervene in the market again if excessive foreign exchange fluctuations continue.

“We are always ready to take decisive action,” the top Japanese currency diplomat said.

“Although intervention fears are growing ahead of the 150 threshold, the yen is expected to continue to grind lower for the time being as the difference between the monetary policy directions of Japan and the United States has not changed,” an official at a Japanese brokerage firm said.

JIJI Press