Why Haven-linked CHF Defeated Anti-risk JPY| KOL Forex Analysis•Jasper Lo

n July 29, the rating agency Fitch revised its outlook on Japan's Long-Term Foreign-Currency Issuer Default Rating to negative from stable, citing the sharp coronavirus-induced economic contraction in Japan. It also affirmed Japans sovereign rating at 'A'.

In fact, the coronavirus pandemic has shocked Japan, dragging its economy worse than other major industrial powers. One of the reasons is the postponement of the Tokyo 2020 Olympic Games, which caused a huge loss on Japan's government and economy. Stock markets in the U.S. and China have rebounded and performed well with the U.S. Nasdaq Composite on its record-breaking run. Nevertheless, Japan lagged far behind the two countries with its Nikkei stock average down 5% since the start of 2020, despite of its position as the third largest economy in the world.

However, JPY crowned champion in the currency competition with USD and RMB. From this January to July 30, JPY has gained about 3.5% from the continued weakness of USD and the support of hedging factors. Consequently, under the sluggish economy, the anti-risk JPY outshone USD and RMB but became the loser against the haven-linked CHF.

The feature of the two safe haven currencies is that, bearish stock markets induced by risk aversion will give full play to the safe-haven role of JPY and USD, sending them spiking; Conversely, if the markets are punished by risk aversion, safe-linked assets such as CHF and gold may benefit from it. Just as the situation on July 29, higher U.S. stocks set DXY back while fueling further gain in currencies other than USD, only pulling JPY back from uptrend.

Though USD is weak, USD/JYP is expected to swell between 106.10 and 104.45. After this, of course, it is more possible to break 104.45 and head towards 103.00.

[About The Author]

Since 1987, Jasper Lo has been engaged in the financial industry

(forex, futures and gold) for more than 32 years and holds forex R.O.,

securities and futures broker licenses. Mr Lo is an expert in trading

forex, precious metals and commodity futures and an basic and technical

analyst.

Over the years, Mr Lo won many individual and team sales champion

awards, as well as outstanding employee awards. He was invited, as a

guest mentor, to the University of Hong Kong, Guangdong Ocean University

and Guangzhou Jinan University. And he was also appointed as the chief

training consultant by Hantang Securities and Dongguan Securities in

China.

Mr Los experience as guest of honor invited by media including Chinese and English newspapers and columnist:

-Guest of honor invited by TVB New Channels such as Finance Channel, Forex Focus, Global Watch

-Guest of honor invited by Now Finance Channel - Forex Reports

-Guest of honor invited by i-CABLE Finance Info Channel - Forex Opportunities

-Guest of honor invited by ViuTV - Investor Smarter Group

-Columnist of Finance and Forex Market of Ming Pao

-Presenter of Finance and Forex Forecast of Ming Pao

-Presenter of Investment 36 Stratagem and Technical Analysis in 1 Min of Ming Bao Finance

-Appointed lecturer of Ming Pao Investment Seminar and Paid Course

-Author of the best seller Investment 36 Stratagem

-Columnist of Forex Expert, Forex Analyst, Marathon Weekly of ET Net

-Guest of honor of Open Good Morning of ET Net

-Guest of honor of Metro Finance Channel - Market Opening, Instant

Market Fighting, Guangdong-Hong Kong Finance, Finances Power, Market

Analysis

-Guest of honor of New Era of Investment of RTHK

-Columnist of Capital Commodities of Capital Weekly

-Guest Presenter of Wang Guanyi Online Finance Channel - Fund and Commercial Bond

-Columnist of Wealthub Finance and Investment Smart Platform of Enrich Culture

-Guest presenter of Weekly Investment in the World of Enrich Culture

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