Asia's dollar squeeze: yen at 160, rupiah at a low

<p><em>Special Reporting from LSN News, adapted from today's Asia Money Map episode. <a href="https://youtu.be/NsFik02VxF0" target="_blank" rel="noopener">Watch the video on YouTube.</a></em></p>

<p>The US dollar is at its strongest in about nineteen months, and Asia is paying for it. On Thursday the yen briefly broke through 160 to the dollar, Indonesia's rupiah closed at another record low, and Japan's top currency official issued his first public warning since September.</p>

<h2>The cause is in Washington</h2>

<p>US consumer prices rose 0.4 percent in October, above expectations of 0.3 percent. Several Federal Reserve officials then warned that inflation remains stubbornly elevated, and some left the door open to a half-point rate rise. CNBC, citing the CME FedWatch tool, said on Thursday that traders now put a 91 percent chance on a Fed rate hike in December.</p>

<p>The two-year Treasury yield rose to about 4.84 percent and the ten-year yield to about 5.07 percent. The dollar index climbed to 103.16, its highest level since April 2025. Goldman Sachs is among the brokerages that now expect another hike early next year, on top of one in December.</p>

<h2>Japan: 160 and a warning</h2>

<p>Investing.com reports that the yen briefly broke through 160 to the dollar on Thursday, for the first time since early September, before trading at around 159.9. Japan's top currency diplomat, Atsushi Mimura, said he believed recent currency moves had been excessively rapid. In his words: "It's still too early to forget what happened this summer."</p>

<p>He was referring to Japan's yen-buying interventions in late July and early August, including one operation run jointly with the United States. Japan's finance ministry has put the total spent at a record 15.4 trillion yen. Chief Cabinet Secretary Minoru Kihara said the government generally views an undervalued yen as problematic.</p>

<p>The cost is already showing up in prices. Reuters reports that Japan's yen-based import price index jumped 24.8 percent in October from a year earlier, and that wholesale inflation re-accelerated to 7.1 percent. Many analysts in a Reuters poll expect the Bank of Japan to raise rates as soon as next month. But MUFG's Lloyd Chan notes that if the Fed is more aggressive, the gap between US and Japanese rates stays wide, which keeps the carry trade against the yen attractive.</p>

<h2>Southeast Asia is the weakest link</h2>

<p>The Jakarta Globe reports that the rupiah closed on Thursday at 18,239 to the dollar, a new low, down 0.5 percent on the day. That came on the same day that Vice President Gibran Rakabuming Raka submitted his resignation letter to the People's Consultative Assembly. Tempo reports that Jakarta's main stock index actually rose 2.66 percent, to 5,250.9, as analysts at Phintraco Sekuritas said the resignation eased the potential for political tension. Bank Indonesia attributed the rupiah's weakness mainly to shifting expectations for US monetary policy.</p>

<p>There is also index risk. MSCI's November review removed a number of Indonesian stocks from its indexes, and in October MSCI said it was weighing a move of Indonesia to standalone status, with a final decision due by June 2027. iFast research analyst Kok Jun Yong told Dow Jones Newswires that the rupiah is the currency least able to absorb dollar strength, because domestic political uncertainty has made it especially fragile.</p>

<p>Elsewhere, the pain is uneven. Reuters says the Thai baht lost 0.5 percent on Wednesday, and the Malaysian ringgit slipped to its weakest level in a week. The Australian dollar fell to about 68 US cents on Thursday, its lowest since January. Not every currency is cracking: Dow Jones reports that South Korea's won and India's rupee are holding up better than their regional peers, and OCBC strategists credit the rupee's resilience to renewed foreign portfolio inflows.</p>

<h2>Our analysis</h2>

<p>This is a dollar story with Asian consequences, and the region is splitting in two. Economies where foreign money is still coming in, such as India and South Korea, can absorb a stronger dollar for now. Economies where politics or index risk is pushing money out, starting with Indonesia, have far less room. Japan sits in a category of its own: it has the reserves and the will to intervene, but intervention buys time and does not close the interest-rate gap.</p>

<p>Three things to watch: whether the yen holds beyond 160 and whether Tokyo steps in; how quickly Indonesia's People's Consultative Assembly fills the vice-presidency; and what Fed speakers signal before the December meeting.</p>

<p><em>The video presenter, Iris Chen, is an AI avatar; the reporting is by the LSN News desk.</em></p>

<h2>Sources</h2>

<ul>

<li><a href="https://www.cnbc.com/2026/11/12/dollar-near-one-month-high-as-yen-edges-toward-160-.html" target="_blank" rel="noopener">CNBC / Reuters</a></li>

<li><a href="https://finance.yahoo.com/markets/currencies/articles/japans-mimura-reminds-markets-intervention-082838056.html" target="_blank" rel="noopener">Yahoo Finance</a></li>

<li><a href="https://www.investing.com/news/forex-news/asia-fx-holds-losses-as-dollar-hits-19mth-high-yen-nears-160-5020289" target="_blank" rel="noopener">Investing.com</a></li>

<li><a href="https://www.marketscreener.com/news/asian-currencies-falter-as-dollar-thrives-ce785ed8d98cf72d" target="_blank" rel="noopener">MarketScreener / Dow Jones</a></li>

<li><a href="https://jakartaglobe.id/business/rupiah-hits-new-low-as-gibran-exit-msci-fears-rattle-markets" target="_blank" rel="noopener">Jakarta Globe</a></li>

<li><a href="https://en.tempo.co/read/2123507/jci-gains-2-66-following-vp-gibrans-resignation" target="_blank" rel="noopener">Tempo</a></li>

<li><a href="https://www.brecorder.com/news/40448488/dollar-strength-weighs-on-asian-forex" target="_blank" rel="noopener">Business Recorder / Reuters</a></li>

</ul>