CHF/JPY: two economies, one price
CHF/JPY is the Swiss franc against the Japanese yen, which means it is the Swiss National Bank (SNB) against the Bank of Japan (BoJ) and everything those two banks have to react to. Here is where each side stands and what moves it.
The two sides
Swiss franc
Swiss National Bank (SNB)
- Demand for safety. The franc rises when Europe is nervous, whatever Switzerland itself is doing.
- The Swiss National Bank, which has the lowest rate of the eight and a long history of acting on the currency directly.
- Swiss inflation, which is usually the lowest in the group and gives the bank little to react to.
Japanese yen
Bank of Japan (BoJ)
- The interest rate gap with the rest of the world. Japan has held the lowest rate of the eight for years, which makes the yen the funding currency of choice.
- Risk appetite. When markets get nervous, Japanese money comes home and the yen rises on the flow rather than on any Japanese news.
- The Ministry of Finance. Japan has intervened in the currency before and says so openly when it is uncomfortable.
Which of the two pays the higher rate, and what that gap is worth in points a year, is on the rate differentials page, and the releases due for either currency are on the calendar for this week.
How CHF/JPY is scored
Each currency gets a score from 0 to 100 from four parts: risk sentiment, the fundamentals of its central bank and rate level, geopolitics and the price of the week. The score of the pair is CHF minus JPY.
A wide gap means the macro is pulling one way. A narrow one means this pair has no macro behind it today, which is a good reason to look at another one. Members see the number, the reason and the event risk on it every morning.
Before you take it
- Check both sides. A release on either currency moves the pair, and the leg nobody checked is the one that hurts.
- Check the rate gap. It pays you every night you hold, or it costs you.
- Check your other positions. Two pairs that share a currency are one bet.
- Then take the entry from your own chart. Macro for the side, the chart for the moment.
Pairs that share a currency
Two positions that share a currency are one position wearing two names. These are the pairs that move with CHF/JPY.
All 28 pairsQuestions about CHF/JPY
What moves CHF/JPY?
Two central banks against each other, the Swiss National Bank (SNB) and the Bank of Japan (BoJ), the releases each of them steers on, the gap between their policy rates, and the mood of the wider market. A move in either currency moves the pair.
Which currency in CHF/JPY pays the carry?
Whichever of the two has the higher policy rate: long that one against the other earns roughly the difference over a year, before your broker's spread on the swap. The gap for every pair is on the rate differentials page. The rate gaps
Do you publish a CHF/JPY forecast?
No. We score both currencies every trading day and the pair score is the difference between them, with the reason written next to it. That is a reading of now, not a prediction, and the past readings are published with their misses. The track record
Is CHF/JPY a good pair to trade?
It is worth your attention on the days the two sides disagree, and it is not on the days CHF and JPY score the same. Which of those it is today is exactly what the ranking answers.