Yen and Swiss Franc Top Safe-Haven Picks Amid Trump Tariffs, Analysts Say

In light of President Donald Trump’s recent announcement of reciprocal tariffs, investors are flocking to safe-haven assets, with the Japanese yen and Swiss franc leading the charge. Analysts suggest that the yen, in particular, is well-positioned to weather the economic storm caused by the tariffs and a potential U.S. recession. Ebrahim Rahbari, head of rates strategy at Absolute Strategy Research, emphasized that the yen’s relatively low valuation and the expected narrowing of U.S.-Japan interest rate differentials make it a prime candidate for hedging against the trade tensions. The yen has already strengthened about 3% against the U.S. dollar since the tariffs were announced.

The Swiss franc is another key asset favored by market strategists, with many seeing it as an optimal hedge against the market volatility sparked by Trump’s tariff policies. The currency has also appreciated over 3% to reach a six-month high against the dollar. However, some analysts, such as Matt Orton of Raymond James Investment Management, argue that the Swiss franc might be the more reliable option compared to the yen, given the uncertainty surrounding the Bank of Japan’s monetary policies.

While the yen and Swiss franc are the traditional go-to safe havens, Rahbari also pointed out the potential of more “exotic” hedges, such as the Brazilian real. With its low valuation, high yield, and less exposure to global trade, the real has been performing strongly this year and could offer an alternative for investors seeking to mitigate the effects of the tariff-induced market turbulence.

Beyond currencies, gold and bonds are also gaining traction as investors seek to shield themselves from the market upheaval. Gold prices spiked to record highs following the announcement of tariffs, reflecting growing concerns over global economic stability. Meanwhile, the demand for low-risk fixed income options, such as U.S. Treasurys and Japanese government bonds, has surged, with yields falling in response to the growing risk-off sentiment. Despite gold’s price surge, analysts remain optimistic about its potential for further gains as global tensions and economic uncertainties persist.

Source: cnbc