Morgan Stanley holds a GBP/JPY long
Trade: Hold GBP/JPY long from 172.00, Take profit at 180.00, Stop loss at 170.60.
(Medium-term position, open since Aug. 22)
According to MS strategists, GBP/JPY has a strong bullish potential as the BoE and BoJ monetary policies diverge. They expect the BoE to raise interest rates in February, before th election. The major risk is a slowdown of UK economic recovery that may delay rate hikes.
The BoJ, on the contrary, will likely add monetary stimulus in October. "This would signal a more proactive BoJ, supporting local risk assets and inflation expectations".
Chart. Monthly GBP/JPY