Since 2020, EUR/JPY has rallied related to 40%. Economists at ING analyze the pair’s outlook.
EUR/JPY has a minute sure correlation with international fairness markets
EUR/JPY has a minute sure correlation with international fairness markets. If a extra conventional industry cycle emerges the place equities flip decrease headed right into a US recession (equities typically flip six months prior to a recession) and bonds rally, after EUR/JPY must come decrease in sequence with our forecasts. If, alternatively, decrease US charges govern to each bonds and equities rallying after we’re almost definitely underestimating the efficiency of EUR/JPY.
At the bond aspect as neatly, we can have an interest to observe tendencies within the eurozone yielding. The wave inverted yielding curves in Europe produce it too dear for Eastern traders to FX hedge Ecu bond portfolios. Bullish steepening of Ecu curves would see FX hedge ratios building up and EUR/JPY in spite of everything.
