Eurizon: Current yen arbitrage trading is "large scale".

According to Eurizon SLJ Capital, one potential trigger for the narrowing of spreads could be the weakening of the US dollar against the Japanese yen. "Over the next 12 months, the risk is tilted towards the Bank of Japan raising rates faster, while the Federal Reserve easing faster," Stephen Jen and Joana Freire wrote in the report. "We believe that there is a significant amount of yen carry trade currently in the market, and the risk of sudden unwinding of yen carry trades should not be underestimated." Eurizon's "conservative target price" for this currency pair over the next 2-3 years is 125.