RBC like USD/JPY, even as much saying a long is a trade of the week, they hold a "medium-term bearish view on JPY"
The bank citing:
- general risk appetite will be supported
- diminishing trade risks
- capital outflows may pick up as we roll into the new fiscal half hear
Longer-term,
- the investment plans of the Life Insurers for the second half of the fiscal year
- We expect them to confirm the picture from April
- The rising cost of hedging leaves Japanese investors with few opportunities for buying hedged overseas bonds and successive Fed hikes will force investors to cut hedge ratios on existing UST holdings
