The Euro needs time, but the Yen still needs change, economists at Société Générale report.

EUR/USD: Waiting for things to calm down before rising

“If/when uncertainty about the global macro and geopolitical backdrop decreases, EUR/USD should move higher. USD/JPY on the other hand needs more BoJ action to justify a big move lower unless Fed easing becomes a realistic short-term prospect.”

“If the BoJ does nothing, and Treasury yields don’t fall, USD/JPY will probably rise. We expect the next policy move in June, which doesn’t really suggest that USD/JPY will break out of its 128-138 year-to-date range.” 

“We haven’t changed our forecast of an eventual move to USD/JPY 125, but a more aggressive BoJ adjustment than we expect could see another sharp bout of Yen strength.”