Two
\ncurrencies that shaped global markets for the past 70 years are losing their
\nstatus. The yen is no longer the world\u2019s free credit line and the dollar is no
\nlonger the clean safe haven. That vacuum has to be filled by somebody \u2014 and
\neverything now points to the Swiss franc \u2014 both the world\u2019s new funding
\ncurrency and its ultimate refuge.<\/p>\n
The yen under For Carry USDJPY, weekly chart<\/p>\n In Japan Interest Rate<\/p>\n Tokyo The dollar\u2019s problem<\/strong><\/p>\n The But IMF\u2019s Currency Composition of Official Foreign Exchange Reserves<\/p>\n The And Federal Funds Effective Rate and Inflation, consumer price<\/p>\n History The vacuum and While In Swiss National Bank rates<\/p>\n The Meanwhile, In The world is already moving<\/strong><\/p>\n It\u2019s The USDCHF daily chart<\/p>\n Even Put Market reaction<\/strong><\/p>\n The USDCHF daily chart<\/p>\n FX Conclusion<\/strong><\/p>\n Two The The
\npressure<\/strong><\/p>\n
\nthirty years the yen symbolized cheap money and powered global carry trades.
\nBut today, that reality has burned out. The Bank of Japan drowned in policy
\nchaos, inflation is stuck, and the USDJPY exchange rate has broken through 160.
\nWhat was once seen as the ultimate safe haven has become a liability. The
\nmarket is already moving on.<\/p>\n
\ntrade was born in Tokyo. From the late 1990s to December 2024, investors
\nborrowed yen at zero and poured it into everything with yield. But from January
\n2022 the whole structure started to collapse: the yen crashed to 150 per
\ndollar, credibility evaporated and volatility exploded.<\/p>\n
\nJanuary 2025, the BOJ finally moved \u2014 hiking to 0.5%<\/strong>, the highest level in 17 years. Why? Because inflation was no
\nlonger an illusion. <\/p>\n
\nCPI pushed past 2.5%<\/strong>, food and
\nenergy costs surged, and domestic demand finally showed up. Add in the pain of
\nhigher import costs from a weak yen, and zero rates were no longer an option.
\nAnd now economists expect another step to 0.75%<\/strong>
\nbefore year-end.<\/p>\n
\ndollar used to jump whenever markets got scared. Not anymore. Washington keeps
\nusing it as a political weapon \u2014 tariffs on rivals, sanctions on Russia, trade
\nfights with India and anyone else who refuses to play by its rules. The logic
\nwas clear: force the world to use dollars and demand would stay locked in.<\/p>\n
\npolitics cuts both ways. Instead of tightening their grip, sanctions and
\ntariffs pushed countries to experiment with alternatives \u2014 oil deals settled in
\nyuan, sovereigns raising debt in francs, central banks trimming their dollar
\nshare. <\/p>\n
\nCOFER data for Q1 2025 shows the dollar\u2019s share of global reserves edging down
\nto 57.74%<\/strong>, while the pound slipped
\nto 4.7%<\/strong>. The Swiss franc, though
\nsmall, is finally moving the other way \u2014 its share has inched higher for the first time in over a decade<\/strong>. For reserve
\nmanagers, that shift is symbolic: the franc is no longer a niche, it\u2019s becoming
\na credible alternative<\/strong>.<\/p>\n
\ndata tells the same story. The revisions wiped out 911,000 jobs \u2014 nearly a
\nmillion paychecks that simply vanished. August payrolls added just 22,000
\ninstead of the 75,000 expected. That\u2019s not a slowdown \u2014 that\u2019s a halt.
\nUnemployment is stuck at 4.3%. And inflation? It\u2019s not easing. CPI jumped 2.9%
\nyear-on-year, while core held at 3.1%. That\u2019s not cooling \u2014 that\u2019s
\nre-accelerating.<\/p>\n
\nhere\u2019s the danger. Markets still expect the Fed to cut rates this week \u2014 even
\nas inflation ticks higher. Apollo, a Wall Street giant, warns the setup looks
\neerily like the 1970s: inflation dipped, then came roaring back in two brutal
\nwaves. If the Fed eases now, it risks the same trap \u2014 weaker growth, hotter
\nprices, and an even deeper loss of trust in the dollar. <\/p>\n
\nalso shows another danger: market crashes often start not at peak rates, but
\nright after cuts begin. When the Fed blinks, it usually means the economy is
\nalready cracking \u2014 and that\u2019s when confidence truly unravels.<\/p>\n
\nthe rise of the franc<\/strong><\/p>\n
\nthe yen collapsed as funding and the<\/strong>
\ndollar lost its haven shine, the market searched for a replacement. The euro is
\nstuck in recession. The old anchors are gone. That left a vacuum \u2014 and the
\nfranc stepped straight in.<\/p>\n
\n2025, CHF surged 11% against the dollar<\/strong>,
\nwhile EURCHF slid to historic lows. Normally a rally like this would scare off
\ninvestors. Instead, demand accelerated right after the SNB cut rates to 0% in June<\/strong>. <\/p>\n
\nreason? The central bank sent the opposite message: no return to negative
\nrates, no heavy-handed interventions, no more defending \u201cfloors\u201d in EURCHF. SNB
\nChairman Martin Schlegel even spelled it out: \u201cThe barriers to reintroducing negative interest rates are very high.\u201d<\/p>\n
\nSwiss inflation has disappeared. In May, CPI printed \u20130.1% y\/y<\/strong> \u2014 first deflation since COVID. For exporters, a stronger
\nfranc is painful. For global capital, it\u2019s a green light: stability, no
\ninflation risk, and a central bank willing to let the currency run. That
\ncombination makes the franc unique \u2014 0%<\/strong>
\nfor funding, and a safe haven when the world cracks. <\/p>\n
\nshort, the franc is what the yen once was \u2014 without the chaos, without the
\npolicy circus, with far more credibility. And it\u2019s not just theory. Capital
\nflows already prove it \u2014 sovereigns, funds, and banks are treating the franc as
\nthe new anchor.<\/p>\n
\nnot just Zurich policy or Swiss inflation anymore \u2014 the rest of the world is
\nproving the shift with money on the table. This year, Panama secured nearly
\n$2.4 billion in Swiss franc loans from banks this year, saving more than $200
\nmillion compared with dollar borrowing. Colombia, Sri Lanka and Kenya \u2014 they\u2019re
\nall running the same math: why pay a premium for USD when the franc is cheaper
\nand cleaner?<\/p>\n
\ncrisis tape tells the same story. When Israel struck Iran in June, the USDCHF
\nrate initially rose \u2014 a reflex reaction to the dollar. But this movement did
\nnot last long. Within a few days, the market reversed, and the franc rose to
\nnew multi-year highs. Nobody was running to Treasuries. The yen didn\u2019t even
\nshow up. The bid went straight into francs, fast and heavy.<\/p>\n
\nbanks are joining the move. Sight deposits at the SNB spiked CHF 11.2 billion in July<\/strong>, pushing
\nreserves to their highest in over a year. Institutions aren\u2019t waiting for
\ntheory \u2014 they\u2019re already parking liquidity in francs, getting ready for the
\nnext shock. Emerging market borrowers are increasingly turning to Swiss francs
\nin their financing mix. Several EM issuers chose CHF in recent deals. The IFC,
\nfor one, issued a CHF 155 million social bond \u2014 its largest to date in this
\ncurrency.<\/p>\n
\nit all together and the verdict is brutal: the yen has burned out, the dollar
\nis bleeding trust, and capital has already chosen its new home. The franc isn\u2019t
\nwaiting for the future \u2014 it\u2019s already the safe haven of the present.<\/p>\n
\nshift is already visible on the screens. USDCHF
\nhas turned into the new fear gauge<\/strong>: when markets shake, the dollar falls
\nand the franc rips higher. USDCHF has broken down from its consolidation
\ntriangle, pointing straight toward fresh lows. The first target sits near
\n0.787, with the 13-year low not far behind. And with RSI still mid-range, below
\n50 but far from oversold, the message is simple: CHF strength isn\u2019t spent. It\u2019s
\nonly beginning.<\/p>\n
\ndesks that once defaulted to JPY for carry are now building structures around
\nCHF. Even with rates at 0%<\/strong>, demand
\nfor Swiss francs hasn\u2019t dried up \u2014 rather, it has accelerated.<\/p>\n
\npillars of the postwar FX world are crumbling. The yen can\u2019t fund, the dollar
\ncan\u2019t shelter. The market doesn\u2019t wait for nostalgia \u2014 it needs a currency that
\nworks now. And the flows already show where it\u2019s going.<\/p>\n
\nSwiss franc has become the only hybrid left: 0% money for funding,
\nhard-as-stone credibility for refuge. Zurich offers what Tokyo lost and what
\nWashington squandered.<\/p>\n
\nyen\u2019s era is over. The dollar\u2019s safe-haven myth is breaking. For the first time
\nin 70 years, the world has a new anchor \u2014 and it\u2019s Swiss.<\/p>\n","protected":false},"excerpt":{"rendered":"Two currencies that shaped global markets for the past 70 years are losing their status. The yen is…\n","protected":false},"author":2,"featured_media":79920,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[175],"tags":[79,18,19,17,188],"class_list":{"0":"post-79919","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-markets","8":"tag-business","9":"tag-eire","10":"tag-ie","11":"tag-ireland","12":"tag-markets"},"share_on_mastodon":{"url":"","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/79919","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/comments?post=79919"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/79919\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media\/79920"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media?parent=79919"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/categories?post=79919"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/tags?post=79919"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}