The U.S. dollar slid to its weakest level in nearly four years, with the Bloomberg Dollar Spot Index dropping as much as 0.4%, pressured by a surging yen and investor concerns over U.S. policy.

Long-term structural factors, including political polarization, fiscal deficits, and doubts about Federal Reserve independence, are weighing on confidence in the greenback.

The yen strengthened to 153.03 per dollar, fueling speculation of possible U.S.-Japan coordinated currency intervention.

The euro and pound also rose, with the euro hitting its strongest level since 2021, Bloomberg has reported.

Traders are paying record premiums to hedge against further dollar declines, reflecting growing worries about U.S. fiscal and political risks, Fed policy, and potential government shutdowns.