USD/JPY: the dollar should offer buying opportunities after a short-term pursuit of the decline (Morgan Stanley)

Morgan Stanley is looking to buy declines of the USD/JPY on the forex as it is the currency that is most sensitive to higher US rates:

"We are looking to buy drops in the USD/JPY as it is the currency that is most sensitive (within the G10) to higher US rates. The start of the new fiscal year in Japan could boost foreign investment flows that weaken the yen. We buy lower because we expect the dollar to remain low for now.

The global recovery, stronger data on anticipated wages outside of Japan and sustained risk appetite should help the JPY weaken.

The risk - in our opinion - would be a slower appetite for risk, leading to the flight to safe haven assets."