- CAD/JPY tumbled harshly in Q1 2020 on the back of collapsing risk sentiment and lower oil prices.
- However, while Canadian GDP growth sank more aggressively than Japan's, real yields are, in fact, stable, and oil prices are off their lows.
- While oil prices are struggling to gain further ground (still down by a third since the start of the year), a simply stable backdrop will support CAD.
- CAD has already regained its lost ground against USD. CAD/JPY may also return to its recent heights in 2019, yet the winter months must first pass.
- The world is currently facing a second wave of COVID-19. Longer term, there is plenty of reason to buy CAD/JPY. Near term, there are large risks.
For further details see:
CAD/JPY Faces A Risky Winter, But Upside Could Be Found As Canada Rebounds