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BNP Paribas recommend being tactically.....>

EURO-YEN
EURO-YEN: BNP Paribas recommend being tactically short EUR/JPY spot (targeting
127) based on 3 factors:
- 1. The outcome of the BoJ meeting is still probably more hawkish than would
have been expected by the market, before a Reuters story on 20 July created
expectations for a policy change.
- 2. BNP Paribas maintains the view that trade tensions will worsen before they
get better which should result in safe-haven demand for the JPY. Japan could
also face currency criticism from the US if trade tensions escalate further (see
BoJ in spotlight as focus shifts to FX policy).
- 3. FX markets were not positioned long JPY ahead of the BoJ meeting, according
to BNP Paribas FX Positioning Analysis, limiting scope for a paring back of long
exposures now that the event risk has passed
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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