Sterling has been blasted lower after BoE governor Carney cast doubt on a previously pretty-much-expected UK May rate hike. The EU's rejection of Britain's latest Brexit-Irish border plan only served to deepen the rot.
Strategic trade
Trade view / 07 June 2016 at 7:55 GMT

#SaxoStrats: Strong risk appetite could weaken JPY

Head of FX Strategy / Saxo Bank
Instrument: USDJPY
Price target:
Market price:

After a terrible US jobs report, the market has set about celebrating the implications of weak data on Fed policy, which is seen as more cautious than previously, when the Fed was talking up the potential to hike rates two to three times this year. 

Risky assets globally have surged higher since Friday’s bad news. That strong risk appetite should weigh on the Japanese yen, where the focus previously had been on the futility of the Bank of Japan’s policy as Japan faces economic headwinds. 

But in the context of a continued global, risk-on market mood, the negative-yielding yen should be one of the weaker currencies, assuming that the move extends. 

This trade view also incorporate the next round of key US data in early July, in the event we see a bounce/mean reversion in the jobs and other numbers.


Create your own charts with SaxoTraderGO click here to learn more

Source: Saxo Bank 

Management and risk description

Risks to this trade include a shift to weaker risk appetite on concerns about the trajectory of US growth – this is the chief risk to this trade from a US perspective. 

Elsewhere, a vote in favour of the UK leaving the EU at the June 23 referendum could also spell trouble for all JPY crosses as investors ponder the macro implications and sell risky assets again versus JPY.


Long strike: 109.50.

Short strike: 111.50.

Expiry: July 14.

Cost: 52 pips.

Minimum target: 100 pips above cost.

Spot reference (June 7): 107.50.

— Edited by Michael McKenna

For more on contract options click here.

Non-independent investment research disclaimer applies. Read more


The Saxo Bank Group entities each provide execution-only service and access to permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on or as a result of the use of the Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. When trading through your contracting Saxo Bank Group entity will be the counterparty to any trading entered into by you. does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of ourtrading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws. Please read our disclaimers:
- Notification on Non-Independent Invetment Research
- Full disclaimer
- 沪ICP备13028953号-1

Check your inbox for a mail from us to fully activate your profile. No mail? Have us re-send your verification mail