“The Japanese yen will be a good candidate – and probably the best – to hide from trade tensions and an American recession, for a whole series of familiar reasons,” said Ebrahim Rahbari, head of the rate strategy during research on absolute strategy.
Zhang Xiaoyu | Xinhua press agency | Getty Images
Investors flock securely assets after US President Donald Trump announced a band of reciprocal rates last week – and some look at the Japanese yen, obligations, as well as some other “exotic” assets.
“The Japanese yen will be a good candidate – and probably the best – to hide from trade tensions and an American recession, for a whole series of familiar reasons,” said Ebrahim Rahbari, head of the rate strategy during research on absolute strategy.
“It is cheap, the likely decrease in American interest rates will reduce the rate differentials for the Yen, and even if Japan is a leading exporter, its overall dependence on trade is now lower, especially since budgetary policy has been loose,” he told CNBC by email.
The yen has strengthened approximately 3% Against the greenback since April 2, according to LSEG data. Rahbari added that the Swiss Franc is another “obvious candidate” as an investment coverage. The franc also appreciated more than 3% to 0.8522 compared to the US dollar. These movements come while other currencies in the world are weakening.
Another strategist echoes the idea that the Yen and the Swiss franc are among the best options to amortize the impact of Trump’s prices.
“The Japanese Yen and the Swiss franc are good currencies to help mitigate the visceral reaction of the prices,” said Matt Orton, responsible for consultative solutions and market strategy at Raymond James Investment Management.
But Orton expects the Swiss franc to act as better coverage than the yen, given the uncertainty surrounding the path of the rate increases of the Bank of Japan.
The Yen generally surpasses in the period of global recessions or crisis, said Jeff NG, head of the Asian macro strategy at Sumitomo Mitsui Banking Corporation. “Even if the world avoids hard landing, [the yen] Can also do well because the Boj may go further against a wave of central bank delay, “he said.
However, he warned that the Japanese economy is also faced with Trump prices, especially from prices on cars and components. And a slowdown saving would mean that the boj will be more inclined to maintain low rates, keeping the low yen.
A more interesting question is whether there could be more “exotic” hedges apart from conventional shelters, said Rahbari, who has appointed the optional Brazilian Real.
“The idea being that it is inexpensive, has a high transport and that it is relatively less exposed to world trade,” said Rahbari, adding that real was one of the main sub-performatives of currencies this year.
Obligations and gold?
Investors have also stacked cash, as well as low -risk fixed income options such as Treasurys and Obligations.
Bond yields have also decreased, reflecting an increase in the demand for bonds, the return on US Treasury bonds to 10 years of reference down April 2 to a lower 3.873% on Monday.
The yield of state bonds at 10 years from Japan dived at least 1.05% on Monday, a drop of 28.52% compared to the April 2 closure of 1.469%. It is also the lowest that JGB yield at 10 years has been since December 2024.
The positioning of the risks has dominated the markets, because participants sell actions in favor of treasury, golden bars, term contracts on green back, crude oil barrels, volatility purchase options, derivatives of shares and forecast contracts, said José Torres, main economist among interactive brokers.
Gold prices have reached a record level the day after the reciprocal tariff announcement. Although they have fallen a little since then, the prices of the Darling Haven Darling remain at high levels. Market observers expect it to have more space to function while the global markets remain in advance.
“Gold remains stimulated by the climbing of commercial uncertainty, increased geopolitical tensions, a lower US dollar, the increase in purchases of central banks and the growing risks of recession,” said BMI analysts.
The SMBC NG said that gold is generally a safe refuge during the financial crisis, noting that demand from private households and governments remains resilient. Nevertheless, he says, “prices are widely extended.”
The reasons for the stellar start of Gold until 2025 are only stronger now than Trump announced his prices, said Adrian Ash, director of research at Bullionvault.
“Lower trade, higher input costs and narrowing margins seriously injure the stock market, while geopolitical mistrust is deepened. Such a dark perspective of economic growth offers the perfect backdrop for new gold gains,” he said.
American shares closed a brutal week for investors last Friday, down 9.08%, according to Factseet data, while Trump movements attract more calls for global economic slowdown. JPMorgan, for example, has increased the chances of an American and global recession to 60% by the end of the year, compared to 40% before.
“There is no submission for actions at the moment,” said Orton by Raymond James Investment Management.
