We see the JPY developing as the new ‘mini-dollar’ with JPY weakness remaining limited due to the changing voices coming from the Japanese authorities. We have suggested selling JPY crosses over the recent weeks. EURJPY remains one cross which has had limited moves recently and therefore provides good risk/reward. We continue to expect EUR weakness since the region is experiencing low inflation, low growth and has a central bank that is remaining accommodative. There are few major risk events this week; however, a weakening of eurozone PMIs would support our trade.
We recommend selling EURJPY at 137.00, target of 131.50 with a stop at 138.50.
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