Currency markets are pricing in a new geopolitical reality where the Japanese yen and Swiss franc act as “anti-Trump currencies” – gaining value precisely when US trade policies roil markets.
Geopolitical Drivers:
- Japan’s Strategic Position:
- Not reliant on US consumer exports (only 18% of GDP vs Mexico’s 32%)
- Benefits from Chinese supply chain diversification
- Switzerland’s Neutrality:
- No history of US trade retaliation
- Franc’s 45% gold backing provides inflation hedge
Historical Parallels:
- 2018: Yen rose 6% during US-China tariff implementation
- 2020: Franc outperformed USD by 9% during COVID trade halts
Expert Warning:
“These are short-term hedges, not long-term holds,” cautions former BOJ governor Haruhiko Kuroda, noting both central banks may intervene above 140/USD and 0.85/EUR.
