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Mar 20 - 01:24 PM

JPY: Time To Sell EUR/JPY - BofA

By eFXdata  —  Mar 20 - 12:00 PM

Bank of America Global Research discuses EUR/JPY outlook and recommends going short via buying 3mth 117/113 put spread in 1x1, using spot ref 118.5

"We are selling EUR/JPY: We believe JPY will be supported by domestic flow, potential success in containing COVID-19, and the BoJ's lack of ammunition, while EUR would be undermined by the COVID-19 outbreak in Europe and as unwinding of EUR-funded carry trades may have run its course. Essentially, we are expecting JPY/USD and EUR/USD correlation to break," BofA notes. 

"Risks to the trade are more-than-expected "unofficial intervention" by Japanese public institutions, such as the Government Pension Investment Fund (GPIF)," BofA adds. 

Source:
BofA Global Research

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