We’re seeing a meaningful shift in central bank reserve allocations away from the Japanese yen and toward the Swiss franc. This suggests a broader rethinking of traditional safe havens in a post-pandemic, post-globalization environment.

Japan’s recent policy tightening has added volatility to its bond markets, while the BoJ’s higher rates have diminished the return on hedged JPY holdings. Meanwhile, the Swiss National Bank has returned to a more dovish stance, which ironically has made CHF more attractive for USD-based reserve managers looking for stable FX hedging costs.


Go long CHF/JPY as a structural expression of reserve reallocation and shifting preferences for defensive currencies. Look to buy on dips, targeting a move toward recent resistance levels.


Any renewed risk-off sentiment where JPY unexpectedly regains safe-haven flows could weigh on the trade. Watch BoJ communications and U.S. data that may prompt sudden USDJPY moves.

LONG CHFJPY

Jul 11 2025