A steep sell-off in Japan’s yen risks dividing policymakers in Tokyo on whether to embrace a weaker currency or push back against it, raising the stakes ahead of this week’s Bank of Japan meeting.

The yen has tumbled more than 11 per cent in less than two months to hit a 20-year low of nearly ￥130 against the dollar, as traders bet on an expanding gulf in monetary policy between the Bank of Japan and other major central banks that are rapidly removing stimulus measures. BoJ officials have shown no sign of deviating from their ultra-loose monetary policy ahead of a meeting on Thursday even as a worldwide surge in energy prices begins to generate some elusive inflation in Japan.

At the same time, the pace of the yen’s tumble — which included a record-breaking 13-day losing streak — has sparked growing speculation that Japan’s finance ministry will order the central bank to intervene in markets to prop up the currency for the first time since 1998.