Yen and Swiss Franc Strengthen as Investors Seek Safe Havens Amid US-China Trade Tensions and Recession Fears

Amid escalating trade tensions incited by U.S. President Donald Trump's tariffs in April 2025, investors are flocking to safe-haven assets, causing the Japanese yen and Swiss franc to appreciate. Since April 2, 2025, the yen has strengthened approximately 3% against the U.S. dollar, while the Swiss franc has also gained over 3%, reaching 0.8522 against the dollar. These currencies are viewed as safe havens due to the stability of their respective economies and political systems. These currency movements coincide with a broader market downturn, fueled by fears of a potential U.S. recession. Trump's recent imposition of tariffs, including a 10% baseline tariff on most countries effective April 5, 2025, and higher reciprocal tariffs on some nations effective April 9, 2025, have heightened concerns about global economic stability. These tariffs are in response to what the U.S. President views as unfair trade practices and large trade deficits. Safe-haven assets are investments expected to maintain or increase their value during economic uncertainty. Besides the Yen and Swiss Franc, such assets often include government bonds, gold, and defensive stocks. As investors seek to mitigate risk during these turbulent times, the demand for these safe havens is expected to continue driving their value.