From Citibank’s Brent Donnelly:
If my view of a 5% equity correction is correct, the trade is simple. Sell USDJPY with a
120.27 stop looking for a move towards the 117.55 area. This trade works as a pure FX
trade too because Japan has made it abundantly clear that they do not want USDJPY
above 120.00 right now. Every time we get up there, we see another comment or story
saying the Japanese equivalent of “no mas”. Also note that the seasonality in USDJPY is
bearish into mid-March. The optimal short USDJPY window from a seasonality point of
view is 08MAR to 17MAR but I’m getting short now. Have yourself a risk averse day.