JPY: Here Is Why Long EUR/JPY Is A More Attractive Trade Than Long USD/JPY – SocGen

Societe Generale FX Strategy Research argues that as USD/JPY moves are closely-correlated to 10year real yield differentials, being long EUR/JPY is more attractive as long as Bund yields are rising.

“The biggest threat to USD/JPY bulls is that 10year real yields continue to climb in Japan – a risk highlighted by the prospect of the BOJ downgrading its inflation forecast at this week’s meeting….The story is a bit different in EUR/JPY  because German and Japanese inflation expectations are more closely aligned,” SocGen clarifies.

“…With solid growth prospects, while talk of ECB tapering is set to persist, that makes long EUR/JPY seem like a more attractive trade than long USD/JPY,” SocGen concludes. 

Source: Societe Generale Cross Asset Research

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from eFXNews http://feedproxy.google.com/~r/Efxnews/~3/3CX2J397onA/jpy-here-why-long-eurjpy-more-attractive-trade-long-usdjpy-socgen

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