USD/JPY trading strategy
MUFG Research discusses discusses USD/JPY and maintains a bullish bias expressing this view via holding exposure in spot targeting a move towards 112.50.
"We continue to rum a long USD/JPY view. USD/JPY remains the standout currency pair as being most influenced by the 10-year UST bond yield - and we do not see that changing," MUFG notes.
"However, we must also caveat this view as being short-term. Valuation remains stretched at these levels which will limit the upside scope and hence a 2-3 big figure upside potential for USD/JPY might be all we should expect...Take advantage of the possible further move higher in UST bond yields by running long USD/JPY positions. However, be nimble as the scope for yen depreciation based on current valuation metrics, will be limited in scale," MUFG adds.
For bank trade ideas, check out eFX Plus.
