We believe that in case of a strong distress the Nikkei index can suffer the most. Why not European equities? We believe that European equities have already suffered from the recent turmoil while the Japanese index has been heavily unaffected and has recently rallied dramatically, completely diverging from fundamentals whose forecasts have continuously declined recently.
Trade idea: Short Nikkei Long NZDJPY The volatility of the recent week, ahead of the Italian election, has pushed up the safety havens assets as investors turned more risk averse, in particular the JPY appreciated significantly. However, we noticed that the Nikkei 225 Index does not weaken consequently so the inverse relationship between the JPY