Morgan Stanley: The trend of the yen indicates that the euro may become a major currency for arbitrage financing.

Morgan Stanley stated that the potential for further intervention in the Japanese yen may lead investors to stop using the yen as a financing currency for arbitrage trades, opting instead for the euro and Swiss franc. Strategists David Adams, Andrew Watrous, and Molly Nicolin wrote, "If the risk of intervention continues to make investors cautious in the short term, the market may pull back from yen financing positions and look for new financing currencies." Analysts pointed out, "Expectations of yen intervention suggest that the euro and Swiss franc are likely to become the new preferred financing currencies. Considering that geopolitical conflicts may generate safe-haven buying, shorting the Swiss franc carries sudden risks, so the euro may be even more popular."