A Strong Dollar Is Rattling Asia. It Isn’t Just the Yen.

By William Pesek – Barron’s

Global markets rarely turn on interest rate decisions in Jakarta. But Bank Indonesia’s surprising tightening move last week is a terrible omen for investors from New York to Tokyo.

The Indonesian Central Bank’s quarter-point rate increase on April 24 wasn’t about events in Southeast Asia’s biggest economy, but those 10,000 miles away in Washington. A runaway dollar is wrestling capital away from emerging economies everywhere.

The rally has Indonesia once again scrambling to stabilize the rupiah, the Philippines and Thailand delaying rate cuts, South Korea’s central bank obsessing over won levels, China fretting worsening deflation, and the Japanese yen disappearing in real time.