The yen hits a new 38-year low.

On Wednesday, the yen touched 38-year lows against the dollar and historic lows against the euro, continuing its downward spiral as market participants remained on high alert for potential Japanese authorities’ intervention to bolster the currency.

The dollar weakened following a series of weaker-than-expected U.S. economic data, which reinforced expectations that the Federal Reserve would begin cutting interest rates later in the year.

The greenback declined after reports showed U.S. private payrolls rose slightly less than expected in June, and initial jobless claims increased, both indicating a slowdown in the labor market. Additionally, reports of contraction in the U.S. services sector last month and a drop in factory orders weighed on the dollar.

The euro remained strong, supported by persistently high local inflation reported on Tuesday, suggesting the European Central Bank would take its time before considering further rate cuts. The British pound gained ground ahead of Thursday’s UK elections.

The yen continued to be the main focus ahead of the U.S. July 4th holiday, falling to 161.96 units per dollar for the first time since December 1986. Later, the dollar edged up 0.1% to 161.64 units.

Against the euro, the yen also hit a historic low of 174.48 units. The euro ultimately gained 0.4% to 174.22 units.

The Dollar Index, which measures the greenback against a basket of six major currencies, fell 0.2% to 105.41 units.