CHF/JPY surged to a fresh record high today, driven primarily by accelerating Yen weakness and, to a lesser extent, renewed support for the Swiss Franc. The cross has become a focal point for markets expressing both Japan-specific political risk and broader institutional unease centered on the US.
The Yen leg of the move was triggered by widespread reports that Japanese Prime Minister Sanae Takaichi intends to dissolve the House of Representatives at the outset of the regular Diet session on January 23, paving the way for a snap general election. The decision was reportedly conveyed to senior members of the ruling Liberal Democratic Party.
With Takaichi’s cabinet enjoying strong approval ratings nearly three months into her term, markets see the move as a calculated gamble to stabilize a fragile governing position. The ruling coalition currently holds only a razor-thin majority in the lower house, raising incentives to seek a fresh mandate while political momentum remains favorable.
If the lower house is dissolved on January 23, official campaigning could begin as early as January 27 or February 3, with voting widely expected on February 8 or February 15. An early election would allow Takaichi to push her agenda of expansionary fiscal spending.
Beyond domestic economics, a renewed mandate could also strengthen Takaichi’s hand on foreign policy. Her recent parliamentary remarks on Japan’s potential response to a Taiwan contingency have already contributed to deteriorating Japan–China relations, and an election win would give her greater backing to confront diplomatic challenges.
At the same time, the Swiss Franc has found support from safe-haven demand as confidence in the US Dollar softens. The Donald Trump administration’s threat of criminal indictment against Fed Chair Jerome Powell has raised concerns about the durability of US institutional credibility, diverting some defensive flows toward the Franc.
Technically, CHF/JPY’s uptrend resumed decisively this week with a break above 198.53. Near-term outlook remains bullish as long as 196.03 support holds, with the next target at the 138.2% projection of 173.06 to 186.02 from 183.95 at 201.86. A break higher in D MACD above its signal line would confirm strengthening momentum and open scope for further gains toward 161.8% projection at 204.91.
