Japanese Finance Minister Shunichi Suzuki says authorities watching currency’s slide with ‘sense of urgency’.

Japan has signalled it may intervene to prop up the yen after the currency fell to a 38-year low against the US dollar.

Japanese Finance Minister Shunichi Suzuki said on Thursday that authorities would take action as necessary to prevent damage to the economy.

“Rapid, one-sided moves are undesirable. In particular, we’re deeply concerned about the effect on the economy,” Suzuki told reporters.

“We are watching moves with a high sense of urgency, analysing the factors behind the moves, and will take necessary actions.”

The Japanese finance chief made his comments after the yen weakened to 160.88 against the dollar late on Wednesday, its lowest level since 1986.

The latest slump comes amid signals from the US Federal Reserve that it will keep interest rates elevated for longer and concerns over political uncertainty in Europe ahead of the French parliamentary elections.

Japan last intervened to support its currency in April after it hit a 34-year low, buying up a record 9.788 trillion yen ($62.2bn).

Authorities also stepped into the foreign exchange market three times in 2022.

The yen has lost more than one-third of its value since early 2021 as investors sell off the currency amid the yawning gap between US and Japanese interest rates.

While the US Federal Reserve has hiked interest rates over the past several years to bring down spiking inflation, Japan’s central bank has kept borrowing costs near record lows as part of efforts to get prices and wages to rise after decades of economic stagnation.

While the yen’s slide has been a boon for Japanese exporters, it has sharply raised the cost of imports, particularly food and fuel, putting a strain on household budgets.

Japanese stocks fell on Thursday as traders waited for signs of intervention in the market, with the benchmark Nikkei 225 index closing down 0.8 percent.