Dollar surge drives yen, rupiah and Canadian loonie to multi‑year lows

The U.S. dollar index has risen to its highest level in 13 months, spurring sharp declines in several Asian and North‑American currencies. Indonesia’s rupiah slipped to around 17,870 per dollar, its third consecutive trading‑day decline, as investors brace for a possible MSCI downgrade to frontier‑market status and heightened capital‑outflow risk. The Canadian dollar fell to a ten‑year low against the Chinese yuan, trading near 70.6 U.S. cents, while its exchange rate with the U.S. dollar hit the lowest level in about 14 months, reflecting market expectations of further Federal Reserve rate hikes.

Japan’s yen has approached a 40‑year trough, briefly touching 161.93 per dollar – the weakest since 1986. Authorities have signaled possible intervention, with the finance ministry reportedly ready to act and the government having already spent over $730 billion on past market interventions. Analysts note that continued U.S.–Japan interest‑rate differentials and the dollar’s strength limit the effectiveness of such moves. The yen’s decline adds pressure on Japan’s import costs and inflation.

Across the broader market, Asian equities fell as tech stocks retreated following a Wall Street sell‑off, while positive U.S.–Iran talks offered limited support. Investors remain alert to further currency volatility amid the dollar’s upward momentum.