Trading either of these against EUR or CHF (Swiss Franc) has been **very** treacherous for some time. As a (reasonably informed) guess, our hero at Merrill was likely long JPY/NOK and/or EUR/NOK...and refused to take his losses, ultimately losing 9 figures.
Just this past week JP Morgan Chase pulled their longstanding long NOK/CHF trade. Must've cost them a bundle, too.
What kind of rinky-dink compliance/risk department are they running there?