Rupiah Closes in the Green This Afternoon, US Dollar Corrects to Rp17,630
The rupiah exchange rate successfully closed the final trading session of the week with gains against the US dollar.
According to Refinitiv data, at the close of trading on Friday (4/9/2026), the rupiah appreciated by 0.11% to a position of Rp17,630/US$. This position places the rupiah at its strongest level in the last 15 weeks.
Throughout the trading session, the rupiah began in the green, strengthening by 0.23% to the level of Rp17,610/US$. However, its gains were trimmed by 20 points by the close of trading.
Meanwhile, the US dollar index (DXY), which measures the strength of the greenback against six major world currencies, was observed to strengthen by 0.12% to 99.026 at 15:00 WIB.
The rupiah continues to receive support from the sharp weakening of the US dollar in previous trading sessions. The DXY closed down 0.69% on Thursday, providing room for emerging market currencies, including the rupiah, to appreciate.
Pressure on the dollar originated, in part, from the sharp strengthening of the Japanese yen. The yen surged more than 2% against the US dollar to reach 155.47 yen/US$, approaching its strongest position since early May.
The yen’s appreciation was triggered by rising expectations of an interest rate hike by the Bank of Japan (BOJ). The market estimates the probability of a 25 basis point rate hike in September has reached 75%.
These expectations strengthened after BOJ Policy Board member Hajime Takata stated that the central bank needs to raise interest rates more quickly to face inflationary pressures. The strengthening yen also weighed on the DXY, as the Japanese currency is a major component of the US dollar index.
Pressure on the dollar also increased after Federal Reserve Governor Christopher Waller opened the possibility of maintaining interest rates at this month’s meeting. Waller stated that he tends to support a decision to maintain interest rates if subsequent economic data shows that inflationary pressures are beginning to subside.
This statement prompted market participants to reduce expectations for a Fed rate hike in September. The probability of a rate hike fell to 48%, down from 59% before Waller shared his views.
The reduced likelihood of a rate hike makes dollar-denominated assets relatively less attractive. This condition continues to provide momentum for the rupiah, even though the DXY rebounded during today’s trading.
Market attention is now focused on the US labour report to be released on Friday night, Indonesian time. Economists expect the US economy to have created 56,000 new jobs in August, following a loss of 23,000 jobs in July.
Data weaker than expected could further reduce the chances of a Fed rate hike and pressure the dollar. Conversely, a strong labour report could potentially increase expectations for US monetary tightening once again.