Morgan Stanley went short EUR/JPY at.......>

EURO-YEN: Morgan Stanley went short EUR/JPY at yesterday's NY close with a

target of Y119.00 and a stop at Y126.00.

- They "see EUR/JPY shorts as attractive. Markets are ill-positioned for a

potential rise in volatility, particularly in US equity volatility (the VIX

Index). Indeed, the Daily Sentiment Index is at 15% bullish. Japanese financial

markets being closed raises the risk, in our view, of low liquidity exacerbating

downside moves in JPY crosses. Meanwhile headwinds to the EUR may continue if

economic growth continues to underwhelm market expectations. The notable

increase in corporate issuance of debt in low yielding areas, including EUR, may

keep EUR under pressure as well as funds being converted into higher yielding

assets like USD. A key risk to the trade is that European data begin to improve,

leading to EUR strength."