Morgan Stanley Has Limit Orders To Buy USD/JPY At 90 Targeting 100, EUR/JPY At 120.60 Targeting 134

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Morgan Stanley has a limit order to buy USD/JPY at 90.00 with a protective stop at 88.00 at a target at 100.

MS' rationale behind this call is as follows:

"we believe the recent correction in USD/JPY can continue as the next potential bearish JPY signal is not for a few weeks. But in the medium term, we expect Japanese investors to unwind currency hedges on foreign investments, outflows from Japanese money markets, and JPY selling from Toshin accounts. Meanwhile our US Rates Strategy team forecasts US 10y yields to rise 25 bps this year, while we expect the BoJ to hold down JGB yields as part of its JPY weakening policies,"

MS has also another limit order to buy EUR/JPY at 120.60, with a protective stop at 117, and a target of 134.

MS' rationale behind this call is as follows: 

"With no imminent catalysts on the horizon to perpetuate JPY weakness, we expect EUR/JPY will correct lower in the near term. We look for the next leg of JPY weakness in the coming months, when the Abe administration announces the nominees for the next BoJ Governor and Deputy Governors in February. Meanwhile, ongoing portfolio inflows into EMU peripheral debt and a less dovish tone from the ECB should support EUR."

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