EUR/JPY: 'Volatility Creates Opportunity'; EUR/JPY Shorts Likely To Benefit - BofAML

Bank of America Merrill Lynch Research discusses the potential trading opportunities in the current market conditions which have been associated with a a rising volatility. 
"Markets are beginning to price a return to a more "normal" state of market volatility consistent with economic recovery and removal of global monetary policy accommodation. 
We expect the ongoing mean reversion process to produce new trading opportunities, particularly in FX, where a snapshot of existing positioning seems to be a reflection of the past," BofAML argues. 
"In our viewlong positioning in EURJPY looks notably at risk in a regime of rising FX volatility. JPY shorts and EUR longs look individually vulnerable as well. 
Exchange rate patterns seem likely to shift, with less USD and JPY underperformance in normal market conditions and potentially strong outperformance in a proper risk-off episode," BofAML adds.