Analysts at Morgan Stanley shift their view on the USD/JPY pair to neutral from their previous long recommendation.

Key quotes

"We turn neutral for JPY against USD on the back of the recent global financial stability concerns.”

“Repricing of overseas central banks' policy path led to broad JPY strength via the policy convergence channel.“

“While the BoJ continues to be patient to see wage-driven inflation, we see limited room for the market to reprice the Fed policy path higher in the near term.”

"With the risk of the market pricing in further policy convergence, we close our long USD/JPY position and turn neutral until things become much clearer."