According to Japan’s former vice minister of finance for international affairs, Eisuke Sakakibara, the Japanese currency could weaken even further to 170 levels against the U.S. dollar next year. Sakakibara, known as “Mr. Yen” for his efforts to influence the currency’s exchange rate through verbal and official intervention in the late 1990s, said he expects the currency to depreciate further as it hovers near its weakest levels in 32 years. He added that he expects the Bank of Japan to start raising interest rates under continued inflationary pressures “some time later next year” – once central bank governor Haruhiko Kuroda’s term expires in April 2023.

Japan had not intervened in the global currency market to prop up the yen for almost 2.5 decades.

Last month though, as the currency fell, authorities stepped in, spending $21bn (approximately 2.95 trillion yen). It helped for a short time but soon the currency tumbled again, this time crossing 150 yen to the dollar.

The truth is that currency exchange rates aren’t only driven by fundamentals and central bankers’ actions, but also by investors’ sentiments. Most of the business people in Japan are now expecting further depreciation of the yen. So 170/$ is well in the scope.

Japanese officials last publicly confirmed to have taken direct action to defend the currency in September, when they reportedly spent a record 2.8 trillion yen ($19.7 billion) to stem the yen’s sharp declines, according to Reuters. The currency resumed further weakening to breach a key psychological level of 150 within a month. That reportedly triggered another round of intervention, this time with an estimated $37bn.

The Japanese government has so far refused to confirm it stepped in again. Fix experts have warned that these attempts to prop up the yen would only ever have a short term effect.

The weak yen apparently makes everything Japan imports (a long list of items starting from aircraft and ending by countless imported foods) more expensive. The country also relies heavily on imported oil and gas. Because of exchange rates and rising energy prices, the amount of money it spent on imports last month jumped by 46%. But it is not all bad news for businesses, because the money flowing from Japanese exports is worth increasingly more back home. As exports account for about 15% of the country's total economic activity, that is a considerable economic booster for Japan.

However, Japan's consumers have seen their purchasing power halved over the last decade. Ten years ago, 10,000 yen would buy an item worth $132, but today it only gets you something worth $67.