'Mr. Yen' says the currency could plunge further — and 170 per dollar is 'well on the scope'

The Japanese currency could weaken adjacent further to 170 levels against the U.S. dollar adjacent year, according to Japan's erstwhile vice curate of concern for planetary affairs, Eisuke Sakakibara.

Sakakibara, known arsenic "Mr. Yen" for his efforts to power the currency's speech complaint done verbal and authoritative involution successful the precocious 1990s, said helium expects the currency to depreciate further arsenic it hovers adjacent its weakest levels successful 32 years.

Commenting connected reports of yet different involution being conducted by officials precocious past week, Sakakibara said, "Most of the concern radical are present expecting further depreciation of the yen. 170 is good successful the scope," speaking connected CNBC's "Street Signs Asia."

Japanese officials past publically confirmed to person taken nonstop enactment to support the currency successful September, erstwhile they reportedly spent a grounds 2.8 trillion yen ($19.7 billion) to stem the yen's crisp declines, according to Reuters. The currency resumed further weakening to breach a cardinal intelligence level of 150 wrong a month.

Sakakibara's forecast for the yen comes arsenic Japanese officials stay tight-lipped connected publically confirming a 2nd involution taking spot to support the currency.

Finance Minister Shunichi Suzuki was quoted arsenic saying Tuesday that the cardinal slope easing its monetary argumentation and a overseas speech involution were not contradictory.

"Monetary easing aimed astatine sustainable and unchangeable terms hikes including wage growth, and currency intervention in effect to excessive marketplace moves, are antithetic successful presumption of argumentation objectives," Reuters reported Suzuki arsenic saying.

A bulk of economists polled by Reuters expected nary alteration to the nation's dovish monetary argumentation successful its adjacent gathering slated for Thursday.

Twenty-five of 28 polled economists said the Bank of Japan volition apt support its existent stance until the 2nd fractional of 2023.

Sakakibara added that helium expects the Bank of Japan to commencement raising involvement rates nether continued inflationary pressures "some clip aboriginal adjacent year" — erstwhile cardinal slope politician Haruhiko Kuroda's word expires successful April 2023.

"After the Bank of Japan's authorities changes, if the Japanese system is overheated, past determination whitethorn beryllium a alteration successful their monetary argumentation from easing to tightening," helium said. "I expect tightening to hap precocious adjacent year," adding that specified a argumentation displacement could travel successful the signifier of 1 oregon 2 complaint hikes.

"Depends connected the information of the system adjacent year, arsenic expected, if determination is overheating of the economy, which is rather possible, past Bank of Japan volition astir apt rise involvement rates," helium said.

Even if authorities proceed to intervene to support its currency, it won't person overmuch of an effect, Sakakibara said.

"I deliberation authorities cognize that involution itself is not that effective," helium said.

Japanese authorities are not successful denial of the constricted interaction of nonstop overseas speech intervention, according to BK Asset Management.

"The Bank of Japan and the Ministry of Finance person a past of failed interventions — we cognize it, they cognize it," the firm's managing manager of FX strategy Kathy Lien said, soon aft the yen breached 150 against the U.S. dollar and earlier media outlets reported a 2nd involution took place.

"The lone clip the involution efforts genuinely worked was erstwhile it was associated interventions with different G-7 nations," Lien said.

Pointing to the Bank of Japan's monetary argumentation gathering scheduled for adjacent week, Lien said a complaint hike would beryllium much effectual successful defending the yen.

"What they truly request to bash is rise involvement rates," she said. "Between the weakness of the yen and the emergence of enslaved yields, it's truly investigating that quarter-percent 10-year yields cap."

"They're moving retired of options astatine this point," said Lien. Policymakers person ruled out specified a determination to enactment the currency.