“For those Japanese investors who are invested overseas, having their assets in non-yen is a risk because they are exposed to foreign-exchange volatility,” he said on Wednesday. “So when these geopolitical risks, or any risks, get heightened, they want to reduce risk and that means unwinding overseas investments.”

The size of Japan’s overseas investments has been fairly large: At the end of 2016, Japan had around 159.195 trillion yen ($1.448 trillion) in overseas direct investment and 452.917 trillion yen in portfolio investment, according to data from Japan’s Ministry of Finance.

But South Korea’s won doesn’t have the same support. Okubo noted that South Korea is a net creditor with its financial institutions dependent on foreign credit.

Still, pulling funds back into yen amid a heightened possibility that Japan could be a military target may not be the most logical move.

“People with trigger fingers do a knee-jerk response. Never underestimate that factor,” Michael Every, head of financial markets research at Rabobank, said on Wednesday.

But he added, “It’s a traditional response, but personally I don’t see it as in any way rational.”

Indeed, he noted that the U.S. dollar also rose overnight, as another likely safe-haven play on the North Korea tensions.

But with both Japan and the U.S. likely drawn into any potential conflict, he pointed to the euro and the Swiss franc as better safe-haven choices.

Others said that while the yen was seeing inflows as markets turned risk-off, that wasn’t necessarily a safe-haven play.

“It’s not a safe haven whatsoever,” said Jesper Koll, CEO of Wisdom Tree Japan on Tuesday. “It’s really sort of the reverse of the carry trade,” with global macro speculators paying back their short term borrowings as they cut their risk positions, he said.

Koll noted that since the collapse of Lehman Brothers during the global financial crisis, other regions’ banks have made it difficult to borrow for short-term speculation, while Japanese banks have kept open the taps.

But Koll noted that after speaking with sovereign wealth funds, pension funds and insurers, he was more concerned that the latest flare-up of tensions with North Korea presented a more difficult risk situation than investors were accustomed to.

“The key thing that has changed is that there is a regime change in the U.S., where the U.S. is happy to be confrontational and threatening, rather than conciliatory and trying to find a multi-lateral solution,” Koll said. “No one can tell you how this can end or what a possible solution is.”

So while funds were flowing back into the yen, Koll said investors were holding back from investing in Japanese assets, such as equities, because Japan was at risk from a potential escalation of tensions on the Korean peninsula.

Not everyone was on board, however, with pinning the yen’s climb on the tensions over North Korea.

Ed Rogers, CEO of Rogers Investment Advisors, said he doesn’t think the missile crisis had anything to do with the dollar/yen moves.

“Japan is one of the two primary targets for North Korean missiles, so why is it a safe-haven?” he asked, noting the U.S. would be the other target. “I’m quite dubious that because North Korea has marginally improved its missile capability, that’s having an impact.”

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