HSBC economists suggest that while the Japanese Yen (JPY) may see a recovery in 2024, the Swiss Franc (CHF) is expected to continue its weak performance seen so far this year.
In a surprising move, the Swiss National Bank (SNB) cut its rate by 25 basis points on March 21. This unexpected decision led to a further weakening of the CHF since the beginning of the year. As the first among the G10 central banks to take such action, this move is likely to diminish the strength of the currency, especially as investors may opt for carry trades with low foreign exchange volatility.
Looking ahead, analysts anticipate a narrowing of the US-Japan yield differential, which could provide support for the JPY despite short-term fluctuations.