Yen and Swiss franc act as refuge amid AI market jitters

Photo: Atlantic Ambience · Pexels

When the artificial intelligence market shakes, money doesn't sit still. The stock selloff triggered by the emergence of China's DeepSeek model, which cast doubt on the valuations of several tech companies tied to AI spending, had a classic side effect: investors sought refuge in the Japanese yen and the Swiss franc.

The usual reflex

Both currencies share a particular status in global markets: they're considered safe-haven assets, meaning currencies investors tend to move toward when uncertainty rises, regardless of what caused it. It isn't the first time a bout of nerves in tech or geopolitics has driven demand for them.

The reasoning behind this behavior relates to the perceived economic and financial stability of Japan and Switzerland, and to the fact that a large share of speculative currency positions are typically funded in yen, which amplifies moves whenever risk appetite shifts sharply.

Episodes like this are a reminder that currency markets aren't just a reflection of each country's monetary policy, but also a mirror of global investor sentiment. When confidence in high-growth sectors like artificial intelligence wavers, these currencies tend to be among the first to benefit.