(Bloomberg) -- A tumbling yen is spurring traders to game plan how much further Japan’s beleaguered currency can fall even with the specter of intervention looming. 

JPMorgan Chase & Co.’s private banking unit and Bank of America Corp. see 160 as the next potential milestone for the currency that’s already sunk to a 34-year low against the dollar. T. Rowe Price is mulling the risk of the yen dropping to around 170 — a level last seen in the 1980s. 

The path to these levels may be clearer than previously thought if recent market moves are any guide. The yen weakened 1% last week alone as fears of higher-for-longer US borrowing costs spurred a stampede to the dollar. That obliterated forecasts for the Asian currency to rise just a month after the Bank of Japan’s first rate hike since 2007. 

Finance Minister Shunichi Suzuki stopped short of a direct warning when he said on Tuesday that authorities would be ready to take action if needed. His words were softer than his previous threat of taking “bold” measures if necessary, underlining the tight spot that Japan finds itself in as Suzuki heads to Washington for meetings with his global peers. International agreements call for exchange rates to be set by markets.  

“Without intervention, the yen could fall as low as 160.20, the level it reached in April 1990,” said Daisaku Ueno, chief foreign-exchange strategist at Mitsubishi UFJ Morgan Stanley Securities Co., a unit of Japan’s biggest bank. “Intervention is likely to occur once the yen exceeds 155 against the dollar.”

Read: Japan’s Tepid Warning on Yen Fuels Renewed Weakness Ahead of IMF

Even official intervention may fail to effectively halt the yen’s decline, with strategists saying it remains at the mercy of Japan’s yawning rate differential with the US, which is being brought into sharp focus by climbing Treasury yields. The yen’s decline reached a fresh 34-year low of 154.61 in afternoon trading in Tokyo, extending this year’s 9% drop.

While traders are on high alert for intercession from Japanese authorities to bolster the yen, the Ministry of Finance may opt to stay on the sidelines until volatility ratchets up.

Japan’s top currency official, Masato Kanda, has previously said a 10 yen change over the course of one month is rapid. A gauge measuring the FX pair’s low-to-high move over a rolling 28-day window stood at 7 yen, falling short of this threshold.

‘160 Is Next’

For foreign-exchange traders like Mingze Wu, a further decline in the yen is likely only a matter of time. 

“We’re on the lookout for even more yen weakness — 160 is next, it’s a plausible scenario unless fundamentals somehow change,” said Wu, a trader at StoneX Financial in Singapore. “I highly doubt 170 will happen without a strong ‘tsk’ from the BOJ though.”

JPMorgan’s Julia Wang is watching the speed of the yen’s decline — a likely factor in triggering official intervention.  

“It depends on the manner of which we get to 160,” Wang said in an interview with Bloomberg Television. “If it happens in a very rapid and somewhat disorderly way, then I think FX intervention certainly is a risk.”

Commonwealth Bank of Australia strategist Carol Kong also said recent comments from officials “suggest we are in the intervention zone.” 

Kanda has said that authorities were prepared for “all situations all the time,” sending a message to markets that officials were watching currencies with a sense of urgency. 

--With assistance from Masaki Kondo, Katria Alampay, Erica Yokoyama and Emi Urabe.

(Updates with yen setting a new 34-year low.)

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