Corporate Hedging Recommendation: Hedging Against A EUR/JPY Rally

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• EUR sentiment has been dented by Greece and by sub-par economic data releases. However, with signs that the Greek situation is now being addressed and with the recent improvement in Euro area data, we look for EUR/JPY to rally over the coming 12 months.
• For buyers of EUR/JPY, we recommend strategies that take advantage of the current undervaluation in EUR.
• EUR/JPY risk reversals have recovered from the lows of July last year but look attractive from a long-term perspective.

ENDS