Yen Franc forecast
CHFJPY on the fundamental side
The franc-yen pair fell in today's quiet trading, for the second day in a row, after strong rallies during last week's trading, as investors await expansionary fiscal policy by the Bank of Japan (BOJ).
The Cabinet recently approved Prime Minister Sanae Takaichi's record 122.3 trillion yen budget, which aims to balance large government spending and debt management by limiting new bond issuance, yet Japan's fiscal position remains a concern.
With public debt exceeding twice the size of the country's economy, the government faces limited flexibility to implement bold stimulus measures.
The yen's losses were partially offset by signals from the authorities hinting at possible intervention, after Finance Minister Katayama emphasized Japan's freedom to take action against excessive exchange rate fluctuations.
On the monetary policy front, markets are pricing in the next rate hike in July of 2026, with the possibility of an earlier hike if the yen falls further.
Elsewhere in Switzerland, the Swiss National Bank left interest rates unchanged at 0% during a bank meeting.
The central bank noted a slight improvement in the economic outlook following an agreement to reduce US tariffs on Swiss goods.
CHFJPY on the technical side
The yen fell on Tuesday for the second day in a row, as the year draws to a close and most central banks take vacations starting tomorrow, Wednesday.
We are waiting for further declines for the pair towards the support levels and also near the levels of the uptrend on the four-hour frame at 197.00 to 196.50 levels to start building long positions on the pair to target 198.00 and 199.00 levels, in the near term.
This scenario will fail if the 196.20 levels are broken below.
