The Japanese yen has faced a significant downturn recently, reaching 157.20 against the US dollar. This weakening trend challenges traditional expectations of a yen-fueled risk appetite shift. Analysts suggest that Japan’s high public debt (reaching 240% of GDP) and expansionary fiscal policies might be sending mixed signals for global assets. While historically, a weaker yen has been associated with increased risk appetite towards cryptocurrencies due to higher yields on foreign investments, the current environment is marked by distinct dynamics. Experts highlight that rising government bond yields in Japan – reaching a decade high of 1.84% – might force the Bank of Japan to intervene, potentially leading to financial instability if rates remain too low. This dilemma undermines the yen’s traditional roles as both a risk-on currency and a safe haven asset. Meanwhile, the Swiss franc is emerging as a new preferred currency for carry trading. With its fixed interest rate at zero and a ten-year bond yield of just 0.09%, the Swiss franc presents an attractive alternative to investors seeking higher returns in the current volatile market.