The dollar weakened against most major currencies after signs that the United States may support Japan in intervening in foreign-exchange markets undermined confidence in the world’s reserve currency.

The Bloomberg Dollar Spot Index fell as much as 0.5 percent, its lowest level since September, after a routine rate check by the New York Federal Reserve triggered speculation that Washington could help Tokyo curb the dollar’s strength against the yen.

The Japanese currency jumped up to 1.2percent. Futures pointed to losses in US and European equity markets.

Asian currencies rallied on the softer dollar. The Malaysian ringgit reached its strongest level since 2018, the South Korean won climbed to a three-week high, and the Singapore dollar rose to its highest level since 2014.

Currency volatility intensified after Japan’s top currency official, Atsushi Mimura, said Tokyo was coordinating closely with Washington. Prime Minister Sanae Takaichi reinforced the message, warning that Japan stands ready to act.

“The key signal here is coordination,” said Daniel Baeza of Frontclear.

Traders read the New York Fed’s move as preparation for possible joint intervention to support the yen.

The dollar posted its steepest weekly decline since May, pressured by erratic US policymaking, trade tensions with Europe, and growing concerns over political interference in the Federal Reserve.

Over the weekend, fresh worries emerged about another US government shutdown, while President Donald Trump threatened to impose 100 percent tariffs on Canadian imports.

Elsewhere, US Treasuries edged higher as geopolitical risks and tariff threats mounted. Equity markets fell across Japan, South Korea and Hong Kong.

Gold, on the one hand, surged above 5,000 dollars an ounce for the first time, as investors sought safety.

Gold’s rally gathered pace, extending a surge driven by geopolitical uncertainty, waning confidence in fiat currencies, and a retreat from sovereign bonds. Silver rose more than six percent to a record high.

“Investment attention is shifting decisively toward commodities,” said Gerald Gan of Reed Capital Partners. “That reflects rising geopolitical risk, ongoing dollar debasement, ample liquidity and expectations of lower US interest rates.”

Focus has returned to Japan and the dollar after a jump in Japanese bond yields last week unsettled global fixed-income markets. The coming days are critical, with a Federal Reserve policy decision looming and major US companies, including Microsoft and Tesla, set to report earnings.

For currency markets, the prospect of US backing for a stronger yen revives speculation about coordinated intervention to push the dollar lower against key trading partners—a move that could bolster American exporters competing with rivals in China and Japan.

“If the New York Fed joins in, the yen’s rally would accelerate,” said Gareth Berry of Macquarie. “Japan has large dollar reserves to sell. The Fed has no such constraint. It would also signal that the White House wants a weaker dollar more broadly.”