Japanese flow data show a steady acceleration in buying of foreign bonds and equities by Japanese investors, which has not overtaken foreign buying of Japanese assets, notes SocGen.
"This is a source of comfort for yen bears, but the overnight move in USD/JPY has broken the recent range and exposed a clear risk of a flush out of yen shorts. USD/JPY 117 is a potential target," SocGen projects.
For the EUR, SocGen notes the recent improvement in Eurozone data.
"A straw in the wind, a swallow signalling economic summer or just a sign that things aren’t getting any worse? Our bias is towards the last of these but we haven’t finished flushing out Euro shorts yet," SocGen argues.
SocGen sees 1.1070 in EUR/USD as the next upside target.
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