Why are the Japanese yen (JPY) and the Swiss franc (CHF) considered safe currency havens in times of turmoil, like the present crisis in Russia-Ukraine?

Both JPY and CHF have become stronger against the USD and, as per Bloomberg, it is because investors are seeking safe havens. Is this because these are neutral countries?

But, in this situation, any country not directly involved in the crisis can be a neutral country, so why specifically are the Japanese yen and the Swiss franc getting stronger?

2 Answers 2


It's a combination of neutrality, economic power, economic freedom, a history of stability, and tradition.

In the case of the Japanese yen, it's obviously economic power that is the determining factor, as Japan is the world's third largest economy. Switzerland, on the other hand, is only the 19th largest economy, but ranks very high in all the other criteria.

  • Thanks, but why Japan over China (Yuan) since China is the second largest economic power? Why go for third largest?:)
    – Victor123
    Mar 16, 2014 at 17:22
  • 1
    @Victor123: because China has serious deficits in the "economic freedom" criterium, specifically regarding its currency and foreign investment. Buying large amounts of Chinese currency or investing in Chinese companies are actions which the Chinese government keeps tight control over. Mar 16, 2014 at 17:25

Switzerland is presumably where one moves the money in case of an apocalypse; although, they have lost some of that appeal now with the tax reporting to the EU and USA.

Switzerland has a very old, stable banking industry, but this isn't the only appeal. Their reputation for safeguarding money, be it despot or Nazi, is most of the attraction. Low to no taxes is the second. Also, there isn't much financially illegal despite recent changes. Put that all together, and if a country is about to go to hell in handbasket because it borrowed too much or goes to war while Switzerland stays stable and very strict about paying depositors, those residents are going to try to move as much money to Switzerland as possible before its confiscated for one reason or another, sending the CHF up.

Japan is a different duck.

They have persistently ~0% inflation thus low nominal and real interest rates. With them, the so-called "cash & carry trade" or more ubiquitous "carry trade" dominates. Many investors choose to borrow in JPY to buy investments denominated in other currencies. If the countries of those other currencies are about to take their residents' money or go to war, putting money at jeopardy, the residents doing the carry trading will try to unwind their levered investments to reduce risk, sending the JPY up.

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