With the SNB policy rate at zero and the central bank willing to counter excessive appreciation, the franc is gaining appeal relative to the yen. This can weigh on the CHF in calm markets, but an unwind during market stress could amplify its appreciation as short-covering coincides with safe-haven demand.
Read the insights of Gregory Hung, CIO of Banque Richelieu Switzerland, in this article by Sébastien Ruche for Le Temps:
“The Swiss franc will not replace the yen as the main funding currency for carry trades.”
“The yen is considered undervalued and could appreciate.”
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