The yen broke ¥163 to the dollar overnight and hit a fresh four-decade low as fiscal concerns and monetary reality weighed on Japan’s currency and as signs of intervention were few.

It traded to about ¥163.23 and remained weak ahead of the market open in Tokyo on Thursday morning.

The yen was last at these levels in 1986.

Since early June, Japan’s currency has been trading comfortably above ¥160 to the dollar, languishing in a range long considered intervention territory for Japanese officials.

Throughout most of July, it was above ¥162 to the dollar.

The lack of government efforts to prop up the yen and the lukewarm verbal intervention in recent weeks have led to talk of a new red line, and the possibility that Japan may be becoming more tolerant of a weak yen.

Some investors are now watching ¥165 for intervention, while one technical analyst quoted by Bloomberg sees the yen hitting ¥170 to the dollar next year. Finance Minister Satsuki Katayama has warned that the government stands ready to take “decisive action.”

The possibility that Prime Minister Sanae Takaichi will cut taxes and spend aggressively is also a factor cited by some analysts in the yen’s weakening.

Japanese authorities mounted a record round of intervention in April and May, during which they spent $73.6 billion to support the currency. Some investors remain skeptical about the effectiveness of government action, expecting any intervention-driven appreciation to be short-lived at best.

With the interest rate gap between Japan and the United States still wide, yen selling remains strong. The Bank of Japan raised its policy rate to 1% on June 16. The U.S. federal funds rate, the key rate for the dollar, is 3.50% to 3.75%.