(Bloomberg) -- The yen weakened beyond 155 per dollar for the first time in more than three decades, fueling risk that the key level may prompt Japan to step into the market.

The Asian nation’s currency depreciated as much as 0.4% to a session low of 155.37 on Wednesday, marking the first time since June 1990 the yen crossed the 155 level against the greenback. The yen pared the move and traded at 155.21 as of 7:27 a.m. in Tokyo on Thursday.

“Intervention risk remains high, regardless of the level,” said Win Thin, global head of markets strategy at Brown Brothers Harriman.

Helping drive the yen lower Wednesday was demand for contracts to sell it against both the greenback and euro, according to data from the Depository Trust & Clearing Corporation. That included a $300 million purchase of options that expire in a month to sell the Japanese currency at 156 per dollar, pressuring the yen in the spot market. 

Japanese officials have said repeatedly that they will take necessary action to address excessive moves in the yen if needed. The authorities have emphasized a focus on the pace of the currency’s depreciation rather than a precise level. Traders will be alert to any comments from officials in Tokyo on Thursday that suggest a higher state of readiness for intervention.

In a trilateral statement last week, the US, Japan and South Korea said they would continue to consult closely on foreign-exchange market developments while acknowledging serious concerns of Japan and Korea about the recent sharp depreciation in their currencies.

Read more: Japan’s Suzuki: Environment in Place for Intervention If Needed

The yen has slumped about 9% so far this year, making it the worst performing currency of Group-of-10 countries, even after the central bank in March raised the short-term policy rate for the first time since 2007. Adding to the currency’s plight is the risk of higher oil prices amid rising tensions in the Middle East because they could hurt Japan’s trade balance.

Traders and strategists are looking ahead to the conclusion of the Bank of Japan’s policy meeting on Friday, at which nearly all economists surveyed by Bloomberg expect the central bank to keep monetary policy on hold.

“A surprising rate hike would make much more sense than FX interventions,” said Piotr Matys, senior FX analyst at InTouch Capital Markets Ltd. While Matys sees it as a low-probability scenario, “the most efficient way to stabilize a battered currency is to surprise the market with a rate hike.”

The Federal Reserve, meantime, is poised to deliver a monetary policy decision next week — with investors closely watching the gap in yields between the US versus Japan. An update of the Fed’s preferred inflation gauge is set to come out after the BOJ decision on Friday. 

“The Ministry of Finance will probably be hoping that the Bank of Japan can offer some hawkish commentary after Friday’s policy meeting,” said Jane Foley, head of foreign-exchange strategy at Rabobank. “However, if US PCE comes in strong later that day, it would reinforce US dollar strength.”

Japan intervened in markets three times in 2022 to prop up the yen after the currency weakened to 151.95 against the dollar. Tokyo spent more than ¥9 trillion ($58 billion) across three occasions in that campaign, which was conducted largely without criticism from international allies including the US.

What made the September-October 2022 intervention successful “was that it coincided with a peak in US rates,” said Marc Chandler, chief market strategist at Bannockburn Global Forex LLC. “BOJ officials cannot be as confident now.” 

--With assistance from Yumi Teso and Robert Fullem.

(Updates price moves Wednesday and adds early price moves on Thursday.)

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