Yen slides past 163 to a near four-decade low today as surging oil prices and higher U.S. Treasury yields buoyed the dollar, keeping traders alert for possible action by Japanese authorities.

In New York trade, the Japanese currency weakened to 163.24 per dollar, its softest level since late 1986, and hovered near 163.21 early in Asia.

The dollar advanced broadly overnight, briefly nudging the euro under 1.14 dollars, and held firm as U.S. forces carried out an 11th consecutive night of strikes on Iran. According to a Commonwealth Bank of Australia strategist, ongoing conflict in the Middle East tends to favor the dollar due to safe-haven demand and its historical link with oil prices.

The euro last traded around 1.1401 dollars. The Australian dollar stuck near 70 U.S. cents, while the New Zealand dollar held just above its 200-day moving average near 0.5825 dollars.

Sterling was also under pressure, slipping through its 200-day moving average to 1.3385 dollars as markets assessed how new U.K. finance minister John Healey might fund spending plans.

Oil and bond markets added to the dollar’s tailwind. Brent crude futures touched a six-week high of 91.99 dollars a barrel, while U.S. yields climbed across the curve.

The 30-year Treasury yield reached a two-month peak of 5.15 percent. Moves above 5 percent on the long bond often reverberate globally, weighing on risk assets and supporting the greenback.

A 20-year Treasury auction later today is in focus.

Benchmark 10-year yields rose to 4.64 percent, the highest since May, before steadying near that level in early Asia, adding pressure on the yen.

Years of low interest rates and renewed questions over Japan’s fiscal outlook have steadily weakened the currency. Tokyo conducted record interventions in April and May after dollar/yen topped 160, but those effects faded.

Officials have since shifted to less vocal, surprise tactics aimed at deterring speculative bets, leaving the door open to act if the yen lurches to new lows.

A brief lift from comments by Japan’s finance minister about potentially steering some government pension fund foreign holdings back into domestic markets has also dissipated, returning focus to the likelihood of official yen buying.

Analysts at HSBC, led by global head of FX research Paul Mackel, said they expect authorities may step in again soon. They cautioned that without a series of hawkish Bank of Japan rate increases, a renewed easing bias at the U.S. Federal Reserve, or a shift in views on Japan’s fiscal health, any intervention may not deliver lasting strength.

Their base case sees dollar/yen confined to a higher range of 160 to 165, punctuated by periodic interventions but underpinned by Japan’s negative real rates.

Yen slides past 163 keeps traders on alert

For Hawaii travelers and businesses with ties to Japan, currency swings can influence airfare, tourism spending, and import costs.

The latest leg lower reflects the global rate backdrop and energy prices, which remain pivotal for the yen’s direction.

For local businesses already navigating higher costs and occasional scams, such as those described in a recent report on an alleged Hawaii check fraud scheme, added currency volatility may further complicate planning.

Japan’s Ministry of Finance continues to monitor markets, and any sharp moves could prompt further intervention.