Twocurrencies that shaped global markets for the past 70 years are losing theirstatus. The yen is no longer the world’s free credit line and the dollar is nolonger the clean safe haven. That vacuum has to be filled by somebody — andeverything now points to the Swiss franc — both the world’s new fundingcurrency and its ultimate refuge.The yen underpressureForthirty years the yen symbolized cheap money and powered global carry trades.But today, that reality has burned out. The Bank of Japan drowned in policychaos, inflation is stuck, and the USDJPY exchange rate has broken through 160.What was once seen as the ultimate safe haven has become a liability. Themarket is already moving on.Carrytrade was born in Tokyo. From the late 1990s to December 2024, investorsborrowed yen at zero and poured it into everything with yield. But from January2022 the whole structure started to collapse: the yen crashed to 150 perdollar, credibility evaporated and volatility exploded.InJanuary 2025, the BOJ finally moved — hiking to 0.5%, the highest level in 17 years. Why? Because inflation was nolonger an illusion. TokyoCPI pushed past 2.5%, food andenergy costs surged, and domestic demand finally showed up. Add in the pain ofhigher import costs from a weak yen, and zero rates were no longer an option.And now economists expect another step to 0.75%before year-end.The dollar’s problemThedollar used to jump whenever markets got scared. Not anymore. Washington keepsusing it as a political weapon — tariffs on rivals, sanctions on Russia, tradefights with India and anyone else who refuses to play by its rules. The logicwas clear: force the world to use dollars and demand would stay locked in.Butpolitics cuts both ways. Instead of tightening their grip, sanctions andtariffs pushed countries to experiment with alternatives — oil deals settled inyuan, sovereigns raising debt in francs, central banks trimming their dollarshare. IMF’sCOFER data for Q1 2025 shows the dollar’s share of global reserves edging downto 57.74%, while the pound slippedto 4.7%. The Swiss franc, thoughsmall, is finally moving the other way — its share has inched higher for the first time in over a decade. For reservemanagers, that shift is symbolic: the franc is no longer a niche, it’s becominga credible alternative.Thedata tells the same story. The revisions wiped out 911,000 jobs — nearly amillion paychecks that simply vanished. August payrolls added just 22,000instead of the 75,000 expected. That’s not a slowdown — that’s a halt.Unemployment is stuck at 4.3%. And inflation? It’s not easing. CPI jumped 2.9%year-on-year, while core held at 3.1%. That’s not cooling — that’sre-accelerating.Andhere’s the danger. Markets still expect the Fed to cut rates this week — evenas inflation ticks higher. Apollo, a Wall Street giant, warns the setup lookseerily like the 1970s: inflation dipped, then came roaring back in two brutalwaves. If the Fed eases now, it risks the same trap — weaker growth, hotterprices, and an even deeper loss of trust in the dollar. Historyalso shows another danger: market crashes often start not at peak rates, butright after cuts begin. When the Fed blinks, it usually means the economy isalready cracking — and that’s when confidence truly unravels.The vacuum andthe rise of the francWhilethe yen collapsed as funding and thedollar lost its haven shine, the market searched for a replacement. The euro isstuck in recession. The old anchors are gone. That left a vacuum — and thefranc stepped straight in.In2025, CHF surged 11% against the dollar,while EURCHF slid to historic lows. Normally a rally like this would scare offinvestors. Instead, demand accelerated right after the SNB cut rates to 0% in June. Thereason? The central bank sent the opposite message: no return to negativerates, no heavy-handed interventions, no more defending “floors” in EURCHF. SNBChairman Martin Schlegel even spelled it out: “The barriers to reintroducing negative interest rates are very high.”Meanwhile,Swiss inflation has disappeared. In May, CPI printed –0.1% y/y — first deflation since COVID. For exporters, a strongerfranc is painful. For global capital, it’s a green light: stability, noinflation risk, and a central bank willing to let the currency run. Thatcombination makes the franc unique — 0%for funding, and a safe haven when the world cracks. Inshort, the franc is what the yen once was — without the chaos, without thepolicy circus, with far more credibility. And it’s not just theory. Capitalflows already prove it — sovereigns, funds, and banks are treating the franc asthe new anchor.The world is already movingIt’snot just Zurich policy or Swiss inflation anymore — the rest of the world isproving the shift with money on the table. This year, Panama secured nearly$2.4 billion in Swiss franc loans from banks this year, saving more than $200million compared with dollar borrowing. Colombia, Sri Lanka and Kenya — they’reall running the same math: why pay a premium for USD when the franc is cheaperand cleaner?Thecrisis tape tells the same story. When Israel struck Iran in June, the USDCHFrate initially rose — a reflex reaction to the dollar. But this movement didnot last long. Within a few days, the market reversed, and the franc rose tonew multi-year highs. Nobody was running to Treasuries. The yen didn’t evenshow up. The bid went straight into francs, fast and heavy.Evenbanks are joining the move. Sight deposits at the SNB spiked CHF 11.2 billion in July, pushingreserves to their highest in over a year. Institutions aren’t waiting fortheory — they’re already parking liquidity in francs, getting ready for thenext shock. Emerging market borrowers are increasingly turning to Swiss francsin their financing mix. Several EM issuers chose CHF in recent deals. The IFC,for one, issued a CHF 155 million social bond — its largest to date in thiscurrency.Putit all together and the verdict is brutal: the yen has burned out, the dollaris bleeding trust, and capital has already chosen its new home. The franc isn’twaiting for the future — it’s already the safe haven of the present.Market reactionTheshift is already visible on the screens. USDCHFhas turned into the new fear gauge: when markets shake, the dollar fallsand the franc rips higher. USDCHF has broken down from its consolidationtriangle, pointing straight toward fresh lows. The first target sits near0.787, with the 13-year low not far behind. And with RSI still mid-range, below50 but far from oversold, the message is simple: CHF strength isn’t spent. It’sonly beginning.FXdesks that once defaulted to JPY for carry are now building structures aroundCHF. Even with rates at 0%, demandfor Swiss francs hasn’t dried up — rather, it has accelerated.ConclusionTwopillars of the postwar FX world are crumbling. The yen can’t fund, the dollarcan’t shelter. The market doesn’t wait for nostalgia — it needs a currency thatworks now. And the flows already show where it’s going.TheSwiss franc has become the only hybrid left: 0% money for funding,hard-as-stone credibility for refuge. Zurich offers what Tokyo lost and whatWashington squandered.Theyen’s era is over. The dollar’s safe-haven myth is breaking. For the first timein 70 years, the world has a new anchor — and it’s Swiss. This article was written by IL Contributors at investinglive.com.