Goldman Sachs expects the Japanese yen to continue to weaken against the Swiss franc.

Goldman Sachs expects that, due to the relative correlation between the Japanese yen and the Swiss franc, as well as the inflation dynamics in Japan, the yen against the Swiss franc will continue to weaken - despite the recent strength of the yen after the lower house elections. Strategist Isabella Rosenberg wrote in a report, overall, the yen is a better safe haven asset in an environment of economic contraction, while the Swiss franc is a better choice for hedging inflation risks. However, in the long term, relative inflation is the main driving factor for the Swiss franc/yen. The recent decline in the Swiss franc/yen "indicates that the market believes the Bank of Japan will have a more hawkish response to the recent lower house elections in Japan." Unless the Bank of Japan "takes more rapid rate hikes, or fiscal policy becomes more restrained," the pressure for yen depreciation is expected to continue.