EUR/JPY: Here Is Why New The Divergence Trade Is Long EUR/JPY – CIBC

CIBC FX Strategy Research makes the case for long EUR/JPY as the new divergence trade over the coning months.

“While last week’s ECB and BoJ statements appeared very similar, with both committing to continue easing policy at their current rates, the currency reactions were anything but. On the day, the euro gained roughly 1% versus the USD, while the yen depreciated.

That’s because ECB didn’t go out of its way to change the market’s view that stimulus will be throttled back soon, while the BoJ pushed back against similar expectations by doubling down on its 0% target for 10-year yields earlier in the month, giving its stand-pat statement more credibility,” CIBC notes 

Actual policy divergence between the ECB and BoJ could come in the months ahead, but expect EUR to outperform JPY even before that, with markets continuing to take no news as good news from the ECB,” CIBC argues.

Source: CIBC Economics – CIBC Capital Markets

The article is published by one of the foremost sources of Forex trading information. Link to the original article above.

from eFXNews

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