<p>Morgan Stanley stated that the Bank of Japan is dovish while the Federal Reserve is showing hawkish signs, which has sparked a new round of speculation about yen arbitrage trades during the summer holiday. However, the situation may reverse in light of weak U.S. non-farm payroll data. It noted, &#34;Given the strong performance of USD/JPY relative to its implied fair value, we believe there is still ample room for USD/JPY to decline.&#34; It maintains a short position on USD/JPY at 147.70, targeting 135, with a revised stop-loss at 151</p>

<p>Morgan Stanley pointed out that due to the dovish stance of the Bank of Japan and the hawkish signals from the Federal Reserve, market interest in yen carry trades has increased. However, weak U.S. non-farm payroll data may lead to a reversal of the situation. The bank believes that the USD/JPY is performing strongly relative to its implied fair value and still has room to decline, maintaining a short position at 147.70, with a target of 135 and a stop-loss at 151</p>

Morgan Stanley: Remains bullish on the yen, as weak U.S. data reduces the attractiveness of arbitrage trades