Morgan Stanley recommend going long NOK/JPY...>

FOREX: Morgan Stanley recommend going long NOK/JPY at Y13.60 with a target of

Y14.50 and a stop at Y13.10.

- MS see "potential for JPY to weaken in the near term as US asset volatility

has stayed muted and US bond yields are rising, incentivizing capital exports

from Japan as yield differentials move against the JPY with the BoJ's yield

curve control remaining in place. We choose to sell against the NOK as we see

the NOK weakness following the Norges Bank meeting as a compelling buying

opportunity. In our view, the Norges Bank was only dovish relative to heightened

market expectations. The downward revision to the rate path forecast was small,

suggesting the central bank's tightening plan remains unchanged. Better domestic

data should allow the Norges Bank to sound more hawkish again, which would boost

the NOK. The late cycle oil rally currently taking place should also support

NOK. Risks to this trade include data weakness in Norway and a significant

sell-off in US risk assets."