Citi have put out a trade idea to buy....>

DOLLAR-YEN: Citi have put out a trade idea to buy USDJPY at Y112.51, targeting

Y114.25, stop at Y111.50. They add USDJPY looking undervalued, the fair-value

estimate based on our fundamentals model has risen to 114 recently after facing

resistance at around 109 over the last two years. 

- Given the current record high and close to record levels of the NASDAQ and

Russell 2000 respectively, a firming of the MXN and a decline in both the CHF

and JPY, we suspect a short tern move from risk-off towards risk-on. This may

cause fast money to buy back any USD shorts, unwinding risk-off traders and

decrease the necessity of repatriation for Japanese investors.

- CitiFX Global Flows and CFTC data (figures 1 and 2) both show Real Money and

Hedge Funds have squared up in JPY recently. This leaves room for further

selling should the macro fundamentals we have highlighted continue.

 - We remain biased for strong USD on the basis of continued strong data

momentum. Headline China GDP in line overnight may support risk (although the

big IP miss confirms our concerns around growth rotation that is likely bad for

AUD and EUR).