The CHF/JPY cross pair consists of the Swiss franc and the Japanese yen. Both currencies are used as safe-haven and funding currencies because of their unique characteristics and low interest rates.
The Swiss franc is the currency of Switzerland. It is legal tender in Switzerland, Liechtenstein and Campione d'Italia. The currency is viewed as a financial refuge because of the stability of the government and financial system of Switzerland. The financial markets in the country are properly regulated and transparent which also leads to the CHF being used as a safe-haven.
The Japanese yen is the currency of Japan and the third most traded currency in the world which is also widely used as a reserve currency around the world. The Japanese economy is one of the largest with Japan being one of the largest exporters in the world. However, it has recently encountered problems resulting from its low fertility rates. Japan has a rapidly aging population and fewer young workers to support the economy. Another issue is deflation which threatens to make the yen so strong that it renders the Japanese exports less competitive.
Factors affecting the CHF/JPY rate include general economic indicators, such as information on employment, inflation data, retail sales, industrial production, trade balance and the release of GDP data, as well as the central bank decisions regarding the interest rates in both countries. Political events, natural disasters and various government policies can impact the CHF/JPY exchange rate significantly.
Risk warning: Trading in FX and CFDs entails high risk of losing capital.
