CHF/JPY is the best performer on the week

CHF/JPY has gained in six of the past seven trading day and it was easily the strongest currency this week, trailing only SEK in the G10 basket.

The JPY and CHF used to be the low-yielding brothers in the market and moved together. The EUR/CHF peg and deflation fight from the BOJ has changed that.

I suspect the Swiss franc will resume its decline but it will be choppy as the SNB unwinds its enormous EUR reserves.

Looking at the CHF/JPY chart, it has gained in 10 of the past 12 weeks and faces no significant resistance on the way to a test of 108.80.