The risk aversion of the yen comes mainly from Japan’s geographical attributes, economic strength, monetary attributes and monetary policy.
- Japan is an island country that is not susceptible to political, war, market fluctuations and other factors, and can avoid the risk of devaluation to the maximum extent (not to say that it will never depreciate)
- As a developed country, Japan’s strong economic strength provides the basis for the stability of the yen and, more importantly, japan has foreign exchange reserves second only to China’s
- The Japanese yen is a freely circulating currency
- The yen is a low-interest currency and is the most direct reason why the yen has become a safe haven currency. Japan’s long-term low interest rates, no reduction, in times of crisis, other currencies may cut interest rates and devaluation, the yen is unlikely to cut interest rates, so the yen is safe
