EUR, JPY flows: EUR bounces after initial dip on French election

The initial negative reaction to the French election result has been reversed, and the EUR is slightly higher on the day, with equities also edging higher. EUR/JPY is the biggest gainer, rising to a new 32 year high at 174.64, with GBP/JPY rising as well to a 16 year high. CHF/JPY hit another new all time high just short of 180. The EUR gains and JPY weakness have little justification in the French news, with the gridlocked parliament much as expected, albeit with a different party split. EUR/JPY gains consequently look to be more driven by momentum than fundamentals. The weakness of the JPY remains hard to oppose without BoJ action due to the strong momentum, despite the fundamental case for JPY gains.