💹Holding to EUR/JPY Short Recommendation: MUFG

We are maintaining a short EUR/JPY trade recommendation. The EUR has staged a modest rebound this week following the heavy sell-off over the past month. However, we are not convinced that the recovery is built on solid foundations. Government bond yields remain elevated across the euro area, particularly in countries such as France.

At the same time, we do not see a clear near-term catalyst that could materially improve investor sentiment towards French government bonds.

The JPY could also benefit from renewed safe-haven demand if AI-related investor optimism continues to fade. - MUFG