Consider selling EUR/JPY this week, advises Citigroup in its weekly FX pick to clients.
"JPY remains vulnerable to swings in risk sentiment. In
addition to demand for JPY as a ‘safe-haven’ currency, overseas investors who
invest in Japanese equities with neutral FX position are forced to buy back the
yen as the Nikkei declines. Given the mixed response to the US employment data
last week and the re-opening of Chinese markets following the long weekend,
there will be potential for some further JPY-positive volatility," Citi says as
a ratiole behind this call.
