Morgan Stanley: still bearish on USD/JPY
Morgan Stanley maintains a bearish view on USD/JPY, tageting 98 yen. Expectations of a stable BoJ monetary policy are expected to support the Japanese currency. At the same time, expectation of low inflation data releases on Friday could increase a chance for additional policy easing In this case MS would review its outlook on the USD/JPY pair. They also recommend paying attention to the trade balance on Thursday.
The bank points that the recent USD/JPY decline was caused by market selling of yen cross pairs (EUR/JPY, CAD/JPY and NZD/JPY). All the 3 crosses are now trading at the lower borders of their trend channels. Break lower will stimulate further JPY buying.
Chart. Weekly USD/JPY