diff --git a/lib/parse.js b/lib/parse.js
index 9404e867ebf..5ecf5326b2f 100644
--- a/lib/parse.js
+++ b/lib/parse.js
@@ -1347,9 +1347,11 @@ function parse($TEXT, options) {
         var loop = S.in_loop;
         var labels = S.labels;
         ++S.in_function;
+        S.input.push_directives_stack();
         S.in_loop = 0;
         S.labels = [];
         if (is("punc", "{")) {
+            S.in_directives = true;
             body = block_();
             value = null;
         } else {
@@ -1357,6 +1359,8 @@ function parse($TEXT, options) {
             handle_regexp();
             value = maybe_assign();
         }
+        var is_strict = S.input.has_directive("use strict");
+        S.input.pop_directives_stack();
         --S.in_function;
         S.in_loop = loop;
         S.labels = labels;
@@ -1370,7 +1374,7 @@ function parse($TEXT, options) {
             value: value,
             end: prev(),
         });
-        if (S.input.has_directive("use strict")) node.each_argname(strict_verify_symbol);
+        if (is_strict) node.each_argname(strict_verify_symbol);
         return node;
     }
 
diff --git a/test/compress/arrows.js b/test/compress/arrows.js
index 9691648e571..b0c820b3960 100644
--- a/test/compress/arrows.js
+++ b/test/compress/arrows.js
@@ -1106,3 +1106,17 @@ issue_5416: {
     expect_stdout: "undefined"
     node_version: ">=4"
 }
+
+issue_5495: {
+    input: {
+        console.log((() => {
+            "use strict";
+            return function() {
+                return this;
+            }();
+        })());
+    }
+    expect_exact: 'console.log((()=>{"use strict";return function(){return this}()})());'
+    expect_stdout: "undefined"
+    node_version: ">=4"
+}