The Swiss franc has emerged as the macro powerhouse among major currencies, while the Japanese yen continues to suffer from entrenched structural weaknesses. CHF/JPY has broken out decisively in recent weeks, powered by divergent fundamentals and a strong technical trend. Here’s a complete breakdown of why this pair offers one of the highest-conviction macro trades right now.

Fundamental Analysis

Swiss macro strength contrasts sharply with Japanese stagnation

The latest data underscores the franc’s dominance. Switzerland posted solid GDP growth of 0.5% QoQ and 2.0% YoY, backed by a healthy trade surplus (+4.3B) and a booming current account (5.1% of GDP). Inflation is stable at 0.1% YoY and 0.2% MoM, allowing the Swiss National Bank to hold rates at 0.00% with minimal downside risk. Unemployment remains exceptionally low at 2.7%.

On the fiscal front, Switzerland continues to impress with a modest budget surplus (+0.4%) and government debt at just 37.9% of GDP — one of the lowest among developed nations.

Japan, on the other hand, remains mired in stagnation. GDP was flat for the quarter, inflation sits at 3.5% YoY, and the Bank of Japan maintains ultra-loose policy with rates at 0.50%. Although Japan recorded a modest current account surplus (4.7% of GDP), its trade balance is barely positive and government debt remains sky-high at 237% of GDP. The budget deficit is wide at -5.5%, and inflation is primarily cost-push rather than demand-driven.

In summary:

• CHF: Growth + Surpluses + Fiscal Prudence + Low Inflation
• JPY: Stagnation + Debt Overhang + Dovish Central Bank

This stark divergence makes CHF structurally stronger than JPY on every macroeconomic axis.

Sentiment Analysis

JPY under pressure, CHF gaining traction in portfolio flows

Investor sentiment further supports the long CHF/JPY view. The yen remains deeply under-owned, with short positions building again after a brief round of BOJ tightening expectations faded. Japanese investors continue to seek foreign assets, driving capital outflows, while speculative accounts remain wary of a central bank still hesitant to normalise policy.

CHF, conversely, is quietly gaining ground. As global macro risks rise — from US fiscal stress to China’s slowdown — Swiss assets are becoming more attractive to defensive portfolios. The franc’s consistent current account surplus and low inflation backdrop add to its appeal.

Key narrative drivers:

• JPY: Persistent BoJ dovishness, capital outflows, geopolitical caution
• CHF: Quiet safe-haven bid, institutional inflows, macro superiority

While CHF positioning is not extreme, its bid is growing more persistent — especially relative to a fundamentally weak JPY.

Technical Analysis

CHF/JPY confirms bullish breakout across all timeframes

The technical picture aligns powerfully with the macro backdrop. CHF/JPY has broken to multi-month highs above the 182.00–184.00 zone, clearing major resistance and confirming bullish trend continuation.

• Ichimoku Cloud: Price is well above the Kumo; bullish twist visible; Lagging Span clearly above cloud and price = strong momentum.
• Conversion/Base Lines: Both sloping up; conversion line (184.42) above base (181.39), confirming trend strength.
• RSI: Elevated at 70.02 with bullish slope, indicating momentum continuation despite nearing overbought territory.
• MACD: Strong bullish crossover remains intact with MACD > Signal; histogram still positive.
• Volume: Increasing on rallies — confirming institutional participation.

Key levels to watch:

• Support: 182.90 (Kumo top), then 181.40 (Base Line)
• Resistance: 187.00, then psychological 190.00

Multi-timeframe structure is cleanly aligned:

• Daily: Bullish breakout
• Weekly: Strong uptrend continuation
• Monthly: Multi-year resistance breached — structural bull run in motion

Conclusion

CHF/JPY is a high-conviction long trade backed by macro, sentiment, and technicals

Everything is aligned in favour of the Swiss franc over the yen. The macro data points to a structurally superior economy with surpluses, low inflation, and sound fiscal policy. Sentiment reflects growing CHF demand and persistent JPY weakness. Technically, the pair has broken out of consolidation and is trending with full momentum indicators in sync.

This is one of the clearest relative-value trades in the current G10 landscape. Any dips toward the 182.50–183.00 zone should be viewed as potential entries, with the next macro upside target in the 190.00 region.

Traders looking for a high-conviction, macro-supported trend opportunity need look no further than long CHF/JPY.