As the storm of the US election approaches, is the weakened yen the best safe haven asset?

Bloomberg reported that despite the poor performance of the Japanese yen this year, it may still become the most sought-after safe haven asset for investors during the US presidential election. (Background: Japanese parliament election》LDP suffered a severe defeat, yen hit a 3-month low, will Fumio Kishida become the shortest-serving prime minister? Predicted Central Bank delay in raising interest rates) (Context: Japan admits difficulty in solving inflation, Central Bank President losing sleep over timing of interest rate hike, yen depreciates to a three-month low) Against the backdrop of the Central Bank of Japan's announcement in March this year to end the era of negative interest rates since 2007 and choose to raise rates again at the end of July, the yen's performance has remained weak this year. According to Google Finance data, the exchange rate of the US dollar against the Japanese yen has risen by 8.81% so far this year, causing concern among many investors about whether the yen is still a good investment choice. Source: Google Finance Bloomberg: Yen may be the best safe haven asset during the US election In this context, Bloomberg pointed out in a report yesterday (29th) that although the yen's performance has been weak this year, it may still provide a safe haven for investors during the US presidential election. Specific reasons include: 1. According to statistical data, in past US presidential elections, the yen's performance has been better than the most popular safe assets such as the US dollar, Swiss franc, US bonds, and euro. 2. Japan's record 302 trillion yen current account balance, deep yen liquidity, and relatively low inflation rate have increased the attractiveness of this world's third-largest trading currency as a store of value. 3. During the Trump campaign, Japan was basically not threatened by import tariffs from the US, which may have strengthened investors' confidence in Japan. Ales Koutny, head of international interest rates at the world's second-largest asset management company Vanguard Group in London, said: In the US election, the yen is the best safe haven. 4. Currently, the yen to US dollar exchange rate is at a low level, providing room for fluctuation and government intervention to boost the yen's price. 5. Due to the uncertainty of the US election and the prospect of the new US government expanding the fiscal deficit, weakening confidence in the US dollar and US bonds, as well as investors' increased concerns about other traditional safe haven assets, have also increased the attractiveness of the yen. Stephen Miller, adviser at GSFM, said: The yen is cheap, and the Central Bank of Japan is one of the few central banks that is still tightening monetary policy. If the US bond market suffers from the risk of fiscal deficit, then US bonds may not be the safest asset, and the same goes for the US dollar. Morgan Stanley: It's difficult for the US dollar to be challenged at a low level However, some believe that the yen is still less attractive compared to the US dollar. For example, Morgan Stanley believes that US bonds are more able to withstand dumping pressure caused by a Republican victory led by Trump: Considering that the US dollar accounts for 88% of the $7.5 trillion forex market, its dominant position is difficult to challenge. In addition, Peter Boockvar, chief investment officer at Bleakley Financial Group, also said: The yen used to have a classic safe haven status, but I'm not sure if it still maintains that status now. It seems that the current yen is more related to interest rate differentials. Finally, it is worth mentioning that the results of the Japanese House of Representatives election were released on the 28th of this week, and the ruling coalition formed by the LDP and Komeito only won 215 seats, failing to secure a majority. Before the new government is formed, the yen will also face considerable dumping pressure due to rising political uncertainty. Related reports: Japan BTC / Ether spot ETF advances! Institutions such as Mitsubishi UFJ, Nomura Securities, and Sumitomo Mitsui Banking Corp. propose support Japan's interest rate hike》Zombie companies collapse: bankruptcies exceed 5,000 this year, with debts reaching 138 trillion yen Japan admits difficulty in solving inflation, Central Bank President losing sleep over timing of interest rate hike, yen depreciates to a three-month low〈The upcoming US election storm, is the weak yen the best safe haven asset?〉This article was first published on BlockTempo, the most influential blockchain news media in the dynamic area.