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Forex pairs in this Article » EUR/JPY
FXstreet.com (Barcelona) - According to the NAB Analyst Team, "In light of years end, we advise longing the EURJPY, as this is our highest conviction G10 trade for 2013, but also the one with the highest expected return (9%). Moreover, we expect the trade to earn its keep from both sides of the equation, albeit there will be periods when the yen flat-lines or sets back (in part because too much policy activism gets priced in too soon) and undoubtedly periodic setbacks from the euro side."

"The latter are now as likely to be driven by poor growth fundamentals and what that may mean for ECB policy, than risk of a re-fattening in tail-risks related to what the ECB calls 'redenomination' risk (Italian politics is the next potential pothole but there will doubtless be others (Spain included) on the road to 2014)." Tthey add.

Greece is now secure in the safety net of its international lenders for 2013 at least (albeit longer term doubts about the security of the domestic political consensus to remain within the Euro zone on terms set from outside, will remain). The promise, or activation, of the OMT program is assumed to keep Spanish bond yields contained to allow 2013 debt refinancing to proceed at viable yields. Italy's general election, slated for mid-February, is assumed to deliver the 'responsible' government that outgoing technocratic PM Mario Monti has forecast.
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