• Risk aversion and USD weakness drive USD/JPY lower

• Traders buying options after their premiums fell hard from March 11 peaks

• Implied volatility rebounds - 1-month to 10.4 on Monday vs 9.0 on Friday

• Recall 1-month posted 2025 highs at 12.4 on March 11 when spot hit 146.55

• Other dates rebound too, as do JPY call over put premiums on risk reversals

• Benchmark 1-month 25 delta risk reversals now 1.6 from 1.2 last week

• Reached highest downside vs upside premium since Nov at 1.85 in early March
USD/JPY FX option risk reversals


USD/JPY FXO implied volatility

(Richard Pace is a Reuters market analyst. The views expressed are his own)