Dollar Dives on US Buyback Pledge, Triggers Yen-Style Worries

The US Treasury's surprise announcement of doubling the amount of longer-dated bonds it can repurchase ahead of schedule has sent shockwaves through markets, sparking comparisons with Japan's policies that led to prolonged currency weakness.

The dollar is trading at a three-month low and on track for its worst week of August after the midweek announcement.

Much like Japan's efforts to contain borrowing costs, the US move risks debasing the dollar, according to some market analysts.