The yen may fall through the over three-decade low it reached last year amid Japan’s widening monetary policy divergence with the U.S., according to Eisuke Sakakibara.

Known as “Mr. Yen” for his ability to influence the currency when he was Japan’s vice finance minister from 1997-1999, Sakakibara said the yen may weaken more than 10% from current levels as the Bank of Japan clings to ultra-easy policy while the Federal Reserve raises interest rates to tame inflation. The yen strengthened to about 143.6 per dollar on Friday in Tokyo.

“It might even go beyond 160, maybe next year,” the current president of the Institute for Indian Economic Studies said in Tokyo. At around the 160-per-dollar level, authorities “may be tempted to intervene to strengthen the yen.”

Shorting Japan’s currency has made a comeback among investors as falling Treasuries spur investors to sell the yen in favor of the higher-yielding dollar.

The yen is one of the worst-performing Group-of-10 currencies this year after tumbling almost 9% against the greenback, jolting officials into resuming verbal intervention to slow the yen’s descent and warning of firmer action.

Sakakibara, who correctly predicted last year that Japan’s currency would weaken to 150 against the dollar, says the yen may continue its decline until the BOJ tightens policy. That may come in the form of simultaneously scrapping negative rates and abandoning control on bond yields late next year.

If the “Japanese economy overheats as has been expected, tightening in 2024 is likely,” he said.

Japanese authorities entered the market in September to support the yen for the first time in nearly a quarter of a century after it hit 145.90 following a BOJ meeting. The next month, Japan stepped into markets again as it quickly approached 152.

In total, the country spent around $65 billion last year to prop up the currency.

Sakakibara recalls waking up at 2:00 a.m. in Tokyo when he was vice finance minister to monitor and give orders to intervene during U.S. trading, albeit in his case to weaken a then much stronger currency. Intervention without warning is likely the most effective strategy to strengthen the yen even today should authorities decide that was necessary, he said.

“If I were in the position, at this moment I would do it as a surprise,” Sakakibara said. “I’d be quiet for a while and just do the intervention without it being expected by the market. That would be more effective.”