The euro usually climbs versus yen in September

Sept 6 – History shows that the euro usually climbs against the Japanese yen in September. It might be prudent for those seeking to go long the single currency this month to invest in EUR/JPY as an alternative to a fragile.

A study of EUR/JPY’s seasonal performance shows it has posted a positive return in 14 of the last 23 September months. Seasonality should not be considered in isolation, but when combined with other factors it can be a useful tool.

Two factors that point to a EUR/JPY rise are interest rate differentials and the strong relationship between the cross and USD/JPY. European Central Bank policy rates are well above the Bank of Japan’s, and markets expect this to remain the case for the foreseeable future. EUR/JPY’s 30- and 60-day correlations with the bullish USD/JPY are well above +0.7, meaning the two currency pairs continue to move in tandem with each other.

(Martin Miller is a Reuters market analyst. The views expressed are his own)