THP Daily Market Report: September 19, 2025 (Fri)

A Superficial Silence, A Subterranean Collapse

Key Market Indicators

Nikkei Stock Average¥44,551.20

TOPIX3,105.78

USD/JPY144.15

EUR/USD1.0980

VIX Index35.8 (Extreme Fear)

MOVE Index155.4 (Extreme Alert)

Gold$2,450/oz

WTI Crude Oil$61.25/bbl

HY OAS+150bp (vs. prior day)

【Top Priority Item】Fed and Treasury Issue Joint Statement, But Market Suspicions Are Not Dispelled

In the early hours of today, following the collapse of Alliance Western Bank (AWB) yesterday, the Fed and the U.S. Treasury issued a joint statement declaring that "the U.S. financial system is sound, all deposits will be protected, and liquidity will be supplied without limit." However, because no concrete bailout measures or stress test results for banks other than AWB were presented, the market judged the statement as mere "jawboning." The stock prices of several regional banks of the same scale as AWB were sold down to their limit, and the panic actually intensified.

This suggests that either the authorities are underestimating the seriousness of the situation, or they are in a position where they cannot take effective measures. The "loss of authorities' response capability" pointed out in the Walpurgis Papers is becoming a reality.

Market Overview and Analysis

The "Death of the Authorities" and the Market's Rebellion

The authorities' statement only added fuel to the fire. The market does not believe their words and is accelerating its risk aversion based on its own judgment.

Complete Freeze of the Credit Market: The high-yield bond spread widened by an astronomical +150bp from the previous day. This means that the high-yield bond market is now dysfunctional. Corporate financing has become virtually impossible.
Disorderly Flight to Safety: The USD/JPY plummeted to the 143 level at one point. In the U.S. Treasury market, with the MOVE index in the abnormal territory of over 150, a distorted situation has occurred where funds are concentrated in short-term bonds while long-term bonds are sold (a sharp widening of the yield spread). This is evidence that the market is even beginning to doubt the Fed's ability to control interest rates.
Concerns about the Real Economy Crush Stock Prices: Both the Nikkei and TOPIX continued to fall sharply. This is not a problem of the Japanese market, but because the market has begun to fully price in that a global credit crunch will trigger a global recession. The continued decline in crude oil prices also supports this.

Strategic Assessment from THP

The situation has reached "Gate-B (Warning)" in the "Snowball Monitoring System."

The MOVE index exceeding 150 and the weekly widening of the HY OAS exceeding +200bp signify a transition to the "Warning" stage according to the protocol. The fact that the authorities' statement was completely ineffective shows that the market has entered a self-sustaining collapse process sooner than we anticipated.

The War-Room has decided to **raise the monitoring level from "Gate-A" to "Gate-B."** The status of THP-7 is upgraded from ALERT(🔶) to **CRITICAL(🔴)**. All personnel are to complete final defense preparations as stipulated in the protocol in preparation for any eventuality that may occur this weekend. The critical point is near.