As reported by Bloomberg, Citigroup analysts are pegging the Japanese Yen as remaining the market’s go-to safe haven of choice when investors are fleeing risk.
Based on the JPY’s performance against the CHF, specifically on days where the S&P 500 loses 2% or more, the Yen took top spot as safe haven of choice, despite the CHF pulling the clear victory in the pre-2008 market era.
According to Citi’s analysts, the Yen surges when Europe is the epicenter of risk flights, meaning that buying the CHF is also no longer an EU-specific safe haven strategy, and with the JPY gaining over 1.3% in the last five trading days, against the Franc’s 0.5% jump, the Japanese Yen is confirmed to be the broader market’s favourite risk-free depot.
“With the outlook for market volatility to stay high going into the end of the year, more frequent bouts of risk aversion are likely to emerge,” the Citigroup analysts wrote. “There is only one standout safe haven currency to own.”