ZURICH: The Swiss franc fell half a percent against the yen on Friday, halting a winning streak which has seen it gain around 8 percent on the back of the Bank of Japan's new monetary easing drive and concerns over North Korea.
Activity in foreign exchange markets has focused on the Japanese yen since the bank embarked on a campaign of bond-buying to reflate the economy. The dollar has gained roughly 7 percent against the yen since the Bank of Japan pledged last week to inject about $1.4 trillion into the Japanese economy.
Although there is little bilateral trade between Switzerland and Japan, with the yen under pressure, the franc is being seen by some as a safe haven for money flooding out of Japan.
"It is comparatively easy to trade in franc-yen. The franc has upwards potential, it is a quality currency and the yen -which is normally the safe haven currency in the region - will remain under pressure, mainly due to the BOJ policy," Praefcke said.
"The franc-yen clearly has upwards potential," she said.
The franc was trading at 106.52 yen per franc. It has risen more than 8 percent against the yen since the BOJ announced its monetary stimulus package on April 4.
Against the dollar, the franc traded at 0.9315 francs per dollar by 0758 GMT compared to the New York close.
It was slightly up against the euro at 1.2174 per euro with eyes on a meeting of European Union finance ministers set to discuss the troubles of Cyprus.
"The euro-franc exchange rate is a bit of a barometer for us to assess investors' stance towards the euro," Commerzbank forex strategist Antje Praefcke said, adding it had stabilised recently.
The Swiss National Bank's case for defending the cap it imposed on the Swiss franc at 1.20 per euro in September 2011 is intact and may get further support next week from producer and import prices, scheduled for release on Tuesday. Consumer prices fell more than expected in March.
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