Why is Japanese Yen a safe haven?

While Japan has very high debt levels, traders tend to be more comfortable with Japan's debt balance, as so much of it is domestically owned. read more

During times of uncertainty, such as the prelude to the Brexit vote, investors tend to gravitate toward the Japanese yen. This causes the yen to appreciate and has led to the common perception of the yen as a safe-haven currency. read more

However, the Japanese yen has maintained safe haven asset properties. For example, in several risk-off periods in recent years, the Japanese yen appreciated against the U.S. dollar. In general, the conditions for a currency to be considered a safe haven include low interest rates, net foreign asset positions and highly liquid financial markets. read more

The yen is therefore “always going to have this safe-haven bid when you do see bouts of risk aversion,” he told Bloomberg TV’s Betty Liu in an interview. Japanese purchases of foreign debt tripled to 4.46 trillion yen ($40.4 billion) in July, the most in a year, according to figures from the finance ministry. read more