The Japanese Yen has been arguably considered the safe haven for offering a steady appreciation despite the preceding years of crises. Such strength is commonly ascribed to the U.S. dollar, but the Dollar failed to offer the lasting performance you would expect during times of uncertainty.
Standard Chartered's Global Head of FX Research, Callum Henderson, is still convinced that the Dollar and Yen are the only safe haven currencies at this moment. A frequently repeated argument in favor of the Yen is that their government was able to sell bonds to their own people instead of collecting money from investors abroad, thanks to the disciplined saving rates of the Japanese. A giant myth from the 90s; their saving rate is already at 3.2% as of 2011. Considering this, Japan is not in such a strong position it is assumed to be. Other factors must have supported the Yen's strength (I'm open to hear your arguments).
If you think more critically, you will realize that both currencies cannot be safe at the same time. First of all, the Dollar is in a constant decline, interrupted by a few strong rallies in between, whereas the Yen had been in a stable uptrend so far. Trading the Dollar requires very accurate market timing while holding it for the long term has been a losing proposition. The Yen on the other hand is now breaking crucial support along with the 200 EMA. Not highly encouraging signs to stay long in this market. The result is that both currencies appear unattractive and the primary question is which one is going to depreciate faster.
At this moment it seems likely that the Yen will lose value faster than the Dollar, hence justifying a long position in the USD/JPY currency pair. It does not necessarily mean that the Dollar itself will appreciate, but it will gain relative strength as the Yen declines. Seeing paper currencies in relative, not absolute, strength is the striking characteristic of currency pairs.
We are just seeing the first signs of a crack and time will tell whether it will turn out to be a long-term play. As always, we will be protecting our capital with a properly set stop-loss order. In the case of USD/JPY, a sell stop near 77.30 makes perfect sense for the long position.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.