Capital flight from the dollar, September 16th as a singularity
Today's USD/JPY 138.55 is an outlier that deviates from the range of the past few months and is statistically determined to be a Singularity Point**. This is not a one-off appreciation of the yen.
As shown in the table above, the dollar has also fallen against other major currencies such as the euro (EUR) and the pound (GBP). The US Dollar Index (DXY), which shows this in a unified way, has also plummeted, clearly confirming that today's event is a global "capital flight from the dollar."
The subprime car loan issue that emerged over the weekend and the lack of measures by US authorities have finally begun to undermine confidence in the dollar itself. Markets are beginning to view them as "the issue of the individual sector in the United States," rather than as "the issue of the trust of the United States."
The market on September 16th was an extremely nervous development, with the aftermath of avoiding Black Monday the previous day and the reaction of the Tokyo market after the holidays intersecting. With capital flight from the dollar becoming clearer, each market responded to this fluctuation in global confidence in its own context.
Today's market trends show that the crisis has entered the gateway to a new phase: the collapse of trust in the **primary currency of the dollar**. The panic selling was averted for a while, but that doesn't mean the storm has passed. Rather, market participants regained their calm and began quietly pursuing **' which currency will survive to the end''**.
In our analysis, the epicenter of risk has shifted clearly from subprime car loan ABS to primary dealers that were underwriting and funding it. Market-wide doubts are beginning to concentrate there as to whether they will survive the huge US Treasury bid on September 30th.
From the perspective of information warfare, there is a possibility that a narrative will be formed that attempts to trivialize the domestic problem, such as "this is a sudden appreciation of the yen." We need to continue to point out that this is a global issue caused by the US fiscal structure itself, the collapse of the dollar's confidence**.