• New USD/JPY recovery high 156.76 sparked verbal intervention in Asia Fri

• FX option implied volatility increased and holds firmer levels

• That's after minimal movement/interest after initial post US election drop

• 1-week from 9.25 to 10.25 and 1-month up from 9.9 to 10.15 Friday

• Risk reversals increase JPY call premium to 0.85 over JPY put

• Shows strong inverse spot/vol corellation - wary of USD/JPY downside

• There was renewed interest to buy post Fed, BoJ expiry options (Dec 18-19)

• Expectations of related volatility from those outcomes, driving that demand

• Dec 18 Fed rate cut pricing has slipped post election and now 16bps

• BoJ hike pricing currently stands at 13.6bps. UBS raise USD/JPY forecasts

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