EUR/JPY: 130 here we come – ING

EUR/JPY is staying quite bid despite a variety of geo-political challenges and Chris Turner, Research Analyst at ING retains a high conviction view that EUR/JPY is about to embark on a major bull trend – largely on the back of a view that the world economy is recovering and that the normalisation of central bank monetary policy will be a key theme.

Key Quotes

“For 2H17, we think that ECB policy normalisation will trigger a break-out in Bund yields – probably lifting US yields in the process. At the back of the pack will be the BoJ, who should keep JGB yields stable near 0% into year-end.”

“There is also the prospect that France and Germany could push for stronger Eurozone integration after German elections in Sep.”

“We compare the current environment to 2005-2007 – where synchronised global growth & ECB hikes helped EUR/JPY higher.”