Economists see two currencies of “refuge” in front of the turbulence caused by American customs duties

Investors are heading for safe refuge assets after US President Donald Trump has upset financial markets around the world through the customs duties he has announced, and some of them pay attention to the Japanese Yen and the Swiss franc, as well as bonds, transmits the CNBC financial television.

“The Japanese yen will be a good choice, and probably the best, to beware of commercial tensions and a possible recession in the US, from a lot of well-known reasons,” said CNBC Rahbari, the head of the interest strategy at the Absolute Financial Consulting Company Strategy Research.

“It is cheap, it is expected that the decrease of interest rates in the US will reduce the difference in interest to Yen, and even though Japan is an important exporter, its general dependence is lower now, especially since the fiscal policy has been relaxed,” he said under the conditions in which Yen has already appreciated about 3%.

Rahbari added that the Swiss franc is another obvious “candidate” as an investment protection tool. The franc was also appreciated by over 3%, reaching an exchange rate of 0.846 compared to the US dollar – a new maximum of the last six months.

These movements come in the context in which other coins in the world depreciate.

Yen and Swiss franc, relatively stable coins in periods of turbulence

Another strategist has supported the same idea that both the Yen and the Swiss franc, are among the best options to mitigate the impact of customs duties announced by Donald Trump last Wednesday based on a calculation that has narrated the specialists.

“Both the Japanese Yen and the Swiss franc are good coins to reduce the visceral reaction to the customs duties,” said CNBC Matt Orton, the head of the Department of Consultative Solutions and Market Strategy at Raymond James Investment Management.

However, Orton expects the Swiss franc to provide better protection than Yen, given the uncertainty that is planning on the interest -increasing trajectory by the Bank of Japan.

Jeff NG, the head of the macroeconomic strategy for Asia at Sumitomo Mitsui Banking Corporation, also says that Yen tends to have good yields in periods of global recession or crisis.

A warning related to Japan's national currency

“Even if the world avoids a hard landing, [yenul] It could still have a good evolution, as Boj (Bank of Japan) may continue the increases, in contrast to a relaxation wave from other central banks, ”says Jeff Ng.

He warns, however, that Japan's economy is also facing difficulties because of the customs taxes imposed by Trump, especially those applied to cars and car components. And a braking economy would mean that Boj will be more inclined to maintain low interest, which would keep the yen weak.

Investors also turned to liquidity, as well as to low-risk fixed income options, such as government securities and bonds.

The yields of the bonds decreased, reflecting an increasing demand for these instruments, and the reference yield of the American 10 -year bond went down by 6% of April 2, reaching a minimum of 3.873% on Monday.

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