• FX options were hedging the slim risk that BoJ might tighten policy Friday

• Implied volatility very high with a big premium for USD/JPY downside strikes

• Those hedges quickly unwound after BoJ held and USD/JPY spiked higher

• FXO implied volatility and JPY call (USD/JPY downside) premiums hit

• Benchmark 1-month expiry implied volatility 11.0 to new 2023 low 9.85

• 1-month 25D risk reversals premium for JPY calls 1.8 to 1.1 - low since Feb

For more click on FXBUZ