USD/JPY, USD/CHF Rise as Yields Override Haven Flows Amid Oil Shock

USD/JPY and USD/CHF are both advancing as rising US Treasury yields reassert dominance over traditional safe-haven dynamics, complicating the usual flight-to-safety playbook during the ongoing oil market shock. The sharp moves in crude oil—both Brent and WTI futures—are creating conflicting signals for haven currencies, with the yen and Swiss franc struggling to attract sustained inflows despite elevated risk aversion. The yield differential between US Treasuries and Japanese government bonds continues to widen, supporting USD/JPY upside momentum. Similarly, USD/CHF is benefiting as the franc underperforms relative to dollar-denominated yield appeal. The oil shock is muddying traditional correlations, with energy-driven inflation expectations pushing yields higher and simultaneously undermining conventional haven trades. Traders should closely monitor US 10-year yields as the primary directional driver for both pairs. Near-term resistance levels in USD/JPY and USD/CHF will be tested if yields continue to climb, while any reversal in oil prices could quickly shift the haven trade calculus.