The Yen plunged to its lowest level seen since 1990 on Wednesday, leading the country’s finance minister to caution Japan would take “decisive steps” against excessive currency moves.

In Asian trading, the Dollar increased to 151.97 Yen, its strongest against the Japanese currency since mid-1990, but at the time of writing was down 0.12% at 151.42.

Back in 2022, authorities intervened to bolster the Yen at 151.94, and on Wednesday, Finance Minister Shunichi Suzuki said the same words that led up to the intervention regarding taking “decisive steps” against excessive currency fluctuations.

So far this year the Yen has plummeted over 7%, fuelled by the gap between US and Japanese bond yields, which the Bank of Japan’s rate hike last week did little to alleviate, Reuters reports.

“The market is very sensitive to the 152 area,” stated National Australia Bank strategist Rodrigo Catril. “If we were to break that level then recent history would suggest that intervention would be much more likely.”

In the US, the Dollar is on track for quarterly gains as investors have moderated their expectations for substantial interest rate cuts due to robust economic data and caution from central bankers.

At the time of writing, the Dollar index, measuring the greenback against six major peers, was flat at 104.27, having risen around 3% so far this year. 

The market is primarily focused on US core inflation figures, which are due to be published on Friday. However, a larger-than-forecast rise in US durable goods orders on Wednesday provided a boost to the Dollar, further weighing on the Yen.

Currencies are suffering from the strong Dollar, said chief market strategist at Zurich Insurance group, Guy Miller, including the Chinese Yuan which registered its weakest close since last November on Wednesday at 7.2284.

Meanwhile, the Euro was flat on the day at $1.0835, showing little reaction to Spain’s inflation data, which increased marginally less than forecasted. The Sterling held steady at $1.2633.

“The US economy has done much better than most had expected, particularly compared to other parts of the world,” Miller stated.

“Investors who were perhaps short (betting against) the USD have probably unwound some of these positions... helping to support the Dollar in recent weeks.”