(Bloomberg) -- The yen may weaken to 165 per dollar despite potential efforts from Japan to halt its decline, according to the currency’s top forecaster.

Alvin Tan, head of Asia FX strategy at RBC Capital Markets, sees risk of the yen slumping to that level, which was last seen in 1986. The currency has become a victim of Japan’s yawning interest-rate gap with the US, and even speculation of authorities intervening to support the yen has been insufficient to fully quell the bearishness.

“Intervention is only going to be effective by itself if we see it coordinated particularly with the US,” said Singapore-based Tan. Investors are likely to push dollar-yen higher this year, bypassing the 160 level again to 165 or so, he added.

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The yen fell 0.5% to 155.38 per dollar at 3:37 pm in Hong Kong. It’s down more than 9% this year to be the worst-performing major currency.

Bearish wagers helped pummel the yen to a new 34-year low during a manic week of trading, with speculation rife that Japanese authorities have been galvanized to step in twice to fend off attacks on the currency. That’s morphed the yen from one of the “most boring” currencies in the world into one of the hottest to speculate upon, as near zero interest rates become a killjoy for investors seeking assets with higher yields. 

More declines likely lie ahead for the yen especially if the weakness is gradual, said Tan, who helps RBC’s research team to make forecasts on the yen. The bank was the yen’s top forecaster for the first quarter according to Bloomberg rankings.

“It could be a while before we break” 160 again, and “it’s more the speed of the move that is of concern rather than any particular level” that is likely to trigger intervention, he said.

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