EUR/JPY down 52 pips to 129.75 today
Danske Research discusses the JPY outlook and stays short EUR/JPY from around current levels (spot ref: 129.72), targeting a move towards 121.
"The run for replacing Japanese PM Suga as party president sparked hopes for renewed fiscal stimulus proposed by one of the running favourites, former Minister for Foreign Affairs Fumio Kishida, and BoJ governor Kuroda was out assuring yields will remain low even under more expansive fiscal policy," Danske notes.
"We suggest going short EUR/JPY as the peak in global manufacturing tilts risks to the downside for this cross by a potential unwind in positioning while terms of-trade moves in favour of JPY. Amid this, Japan's macro recovery
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