The dollar flexed while the yen folded, and Asia quietly made a move toward bypassing the greenback. The main event: USD/JPY hit a fresh 40-year low of 162.84 on Wednesday, while India and Japan prepared a direct yen-rupee settlement framework that could chip away at dollar dependence in bilateral trade.

The Bull Case

The dollar is having a moment. The yen crumbled to a fresh 40-year low of 162.84 per dollar on Wednesday, and the greenback has gained 3.54% year-to-date against...