Featured in CNBC: Japanese yen and Swiss franc top hedges against Trump tariffs, according to analysts
- Ebrahim Rahbari
- Apr 7
- 2 min read
Updated: Apr 8
Key Points
“The Japanese yen will be a good — and probably the best — candidate to hide from trade tensions and a U.S. recession,” said Ebrahim Rahbari, head of rates strategy at Absolute Strategy Research.
A more interesting question is whether there could be more “exotic” hedges aside from the classic safe havens, said Rahbari, who named the Brazilian real as an option.
Investors are flocking to safe haven assets after U.S. President Donald Trump announced a swathe of reciprocal tariffs last week — and some are looking at the Japanese yen, bonds, as well as a few other “exotic” assets.
“The Japanese yen will be a good — and probably the best — candidate to hide from trade tensions and a U.S. recession, for a whole host of familiar reasons,” said Ebrahim Rahbari, head of rates strategy at Absolute Strategy Research.
“It is cheap, the likely decline in U.S. interest rates will narrow the rate differentials to the yen, and even though Japan is a prominent exporter, its overall reliance on trade is lower now, particularly as fiscal policy has been loose,” he told CNBC via email.
The yen has strengthened around 3% against the greenback since April 2, according to data from LSEG. Rahbari added that the Swiss franc is another “obvious candidate” as an investment hedge. The franc has likewise appreciated more than 3% to 0.846 against the U.S. dollar — a fresh six-month high.
Those moves come as other currencies around the world weaken.
A more interesting question is whether there could be more “exotic” hedges aside from the classic safe havens, said Rahbari, who named the Brazilian real as an option.
“The idea being that it is cheap, has high carry and that it is relatively less exposed to global trade,” said Rahbari, adding that the real has been one of the major outperformers in currencies this year.
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