Invesco CurrencyShares Japanese Yen Trust

FXY

Market cap $547M

Solid growth and ongoing shareholder-friendly reforms are driving Japanese equity gains, keeping us overweight. We see the AI theme playing out globally.

FXY's recent recovery is mainly driven by soft US economic outlook. The US trade war has weakened the US dollar, supporting the yen and FXY. The BOJ faces a balancing act: fighting inflation while avoiding recession that could stem from the US-Japan trade war -- putting on pause rate hikes in the near future.

Israel's airstrikes on Iran cause global market jitters, driving demand for safe-haven ETFs like GLD, TLT and UUP.

Japan's bond market is causing ripples across global financial markets, with rising long-dated government bond yields threatening to trigger capital flight from the United States and unwind the popular carry trade strategy. The carry trade is a strategy where investors borrow in low-yielding currencies like the yen to invest in higher-yielding assets abroad.

U.S. equities have probably left behind their peak time and may face long-term decline, per Christopher Wood, Global Head of Equity Strategy at Jefferies Financial Group Inc., as quoted on Bloomberg.

Here, we highlight five safe-haven ETFs that investors should consider adding to their portfolios as trade fears continue to escalate.

Wall Street experienced massive volatility in the first quarter of 2025, largely due to trade uncertainty. International economies and gold outperformed.

Nikkei 225 broke below its 200-day moving average and a four-month range configuration. US President Trump's trade war 2.0 against major trading partners triggered a negative feedback loop in Japanese equities due to potential disruption in semiconductor supply chains.

Investors can seek safety in these ETFs as broad-based tariff tensions escalate.

The Japanese yen has been in great shape lately due to hawkish monetary policy and higher safe-haven demand.